Since its release on May 22 this year, ApeCoin has experienced lots of challenges. To date, its prices have steadily decreased. The difficulties started in the middle of the May–June crypto market meltdown.
Although ApeCoin was designed to aid the APE project on its Web3 journey, the token’s price has recently broken to a bearish structure after falling below the $5 support level.
If the bearish structure continues to gain ground, does that mean a rally is imminent?
As of this writing, APE is trading at $4.72, down 7.6 percent in the last 24 hours, data from Coingecko show, Wednesday.
Support For Current Price Range
There is a price range of $4.3145-$6.4290 for the coin right now. The aforementioned $4.3145 range is providing support for the current trading range. In August, bulls used the latter method to try to break over the $7 resistance level.
The token has recently established a bearish XABCD pattern, often known as a double triangle. When the token’s price fell below the $5 support level it had been hovering above since the middle of September up to October 10, the bearish pattern intensified.
The market’s reaction to this apparent price break was strongly bearish, and the resulting sell-off drove prices down by 19.43%. The market is currently trading in the green, though, as investors attempt to recover from the recent downturn.
Hope Or False Optimism?
For the token, the present trend reversal is not unprecedented. The price increase from June to August was a bullish reversal after the token declined from May to June. This sort of reversal is possible if market conditions are favorable.
The current $5 support line breach can go one of two ways:
(1) it can convey sell signals to investors, or
(2) it can give an opportunity to buy the dip for token investors
A new analysis indicates that the supply on exchange metric is currently at its highest level in three months, which is a strong indication that APE holders are preparing to sell their shares.
The CMF figure is also unimpressive. At the time of writing, the bears have total market control. Stoch RSI is currently in oversold zone, indicating that ApeCoin holders are actively selling.
The Bollinger band is also contributing to the difficulty of any bullish movement, as the indicator’s middle band is currently acting as dynamic resistance.
APE market cap at $1.4 billion on the daily chart | Featured image from Capital.com, Source: TradingView.com
Disclaimer: The analysis represents the author’s personal views and should not be construed as investment advice.