ApeCoin price rally inhibited by selling pressure from 625.65 million addresses holding $1.28 billion in APE
- ApeCoin price is bullish on the 4-hour timeframe, coiling up for a 5% rally to breach the $2.140 resistance level.
- The rally is delayed, with addresses holding up to 625.65 million APE tokens worth $1.28 billion, incurring losses.
- A value slump may be imminent as these holders look to sell, with possible turnaround points between the $1.956 and $1.934 range.
- Invalidation of this bearish outlook will occur upon a 4-hour candlestick close above the $2.140 level.
ApeCoin (APE) price remains bullish, edging north while consolidating within a bullish technical formation. While the price strength is strong, the altcoin faces resistance from a huge cohort of traders looking to sell after breaking even on their positions after market prices approach their average costs.
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ApeCoin price could succumb to selling pressure
Despite the recent slump, the ApeCoin (APE) price remains biased to the upside. The token continues to endure volatility, oscillating between two boundaries so that the price action has formed a rising wedge pattern.
A rising wedge pattern is a reversal of a continuation pattern depending on volume. It often manifests during bear markets, appearing when the price moves upward with pivot highs and lows to converge at a single point. When such price action is accompanied by increasing volume, it may signal a continuation of the bullish trend.
After a rejection from the upper boundary of the chart pattern, ApeCoin price is pushing north once again, trying to activate a bullish breakout. APE could break past the $2.140 resistance level and extend north. Such a move would constitute a 5% climb.
APE/USDT 4-hour chart
However, in the face of intense selling pressure, ApeCoin price may not continue north just yet, with on-chain data from IntoTheBlock’s Global In/Out of Money metric attributing this to selling pressure from 625.65 million addresses that hold a total of $1.28 billion worth of APE.
ApeCoin GIOM
Based on the chart above, only 35.40% of APE holders are making a profit (in the money), while 2.04% are breaking even (at the money). However, the lion’s share of traders (62.56%) is incurring losses (out of the money).
The selling pressure, therefore, comes as the 62.56%, holding 625.65 million APE tokens worth around $1.28 billion, look to sell as the market prices approach their average costs, and they are almost breaking even on their positions.
The ensuing selling pressure could send ApeCoin price down to test the 200-day Exponential Moving Average (EMA) support at $1.981. If this level fails to hold as support, APE could descend further to tag the 50-day EMA at $1.956 or, in the dire case, the 100-day EMA at $1.934.
Nevertheless, invalidation of the current bullish outlook would only happen once ApeCoin price breaks below the lower boundary of the rising wedge pattern and records a 4-hour candlestick close below the $1.802 support. Such a move would constitute a 10% drop from current levels.
The Relative Strength Index (RSI) is heading south while the histograms of the Awesome Oscillator (AO) indicator are flashing red and losing volume, thus bearish. With both momentum indicators favoring the bears, ApeCoin price could continue falling.
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. The algorithm of the underlying blockchain technology defines this. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, resulting from the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
