- ApeCoin price closed last week with 8% net positive returns.
- Bears in the shorting APE maybe aiming for last week's low at $4.48.
- Risk to the downside would be invalidated by a breach above $5.99.
ApeCoin price shows evidence to consider that a pullback will occur. Risk management should be advocated moving forward, as the recent uptrend has been volatile and powerful in its own right.
ApeCoin price showing reversal signals
ApeCoin price shows the first signals of an exhausting trend as the price faces resistance from the $6 boundary. Last week the APE price rose by 16%, but profit-taking bears entered the market last minute, forging a weekly settle at $5.54 with 8% net positive returns. Now as price auctions just above the weekly settle, there are technical cues hinting that bulls in the market may face a much stronger challenge.
APE price currently auctions at $5.62. The Relative Strength Index (RSI), an indicator used to forecast future market swings by assessing previous trends, shows a sell-signal that is hard to avoid amongst classical technical analysts. The uptrend has shown several bearish divergences as the price of APE ascended from $5 to $6. The bearish divergence usually indicates that a trend is beginning to lose steam. However, they are commonly found in overbought territory above 70, as was the case for the APE price on January 11 when it reached the $5 zone.
On January 14th, the Ethereum-based NFT token made a new monthly high at $5.50 with a slight diversion on the RSI, still trending in overbought conditions above 80. On January 21, APE rallied once more, marking a high at 5.99. This time the RSI showed a much stronger divergence as the move failed to break above the previous resistance zone at 70.
The RSI’s reading under 70 with divergence is a strong sell signal. If the market is genuinely overbought, traders who entered the market last week could face a challenge. This means buyers who participated in the weekly low at $4.48 are at risk of liquidation. The bearish scenario would result in a 20% decline from the current ApeCoin price.
APE/USDT 1-day chart
Invalidation of the bearish trade thesis could occur if the bulls managed to breach the last week’s high at $5.99. In doing so, the price could rally higher to challenge the September high at $6.47. ApeCoin price would rise by 15% if the bulls were to succeed
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto traders brace for short-term volatility with $2.4 billion options expiry on Friday
Bitcoin and Ethereum options market looks bullish on Friday, according to data from intelligence tracker Greeks.live. The firm said it has identified two Bitcoin calls that show an underlying bullish sentiment among market participants.
XRP recovers from week-long decline following Ripple’s response to SEC motion
Ripple filed a letter to the court to support its April 22 motion to strike new expert materials. The legal clash concerns whether SEC accountant Andrea Fox's testimony should be treated as a summary or expert witness.
Lido adds 4% gains as protocol rolls out first step towards decentralization
Lido takes the first batch of simple DVT validators to live, a step taken to decentralize the protocol. Lido leveraged technology to expand the protocol to multiple node operators, inviting both solo and community stakers.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Bitcoin: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.