Two ‘buy the dip’ signals hint at a 23% upswing for ApeCoin price
- ApeCoin price has dropped 48% from its all-time high to a support level at $14.43.
- A bullish divergence on the 4-hour chart forecasts a 23% upswing to $19.06.
- A daily candlestick close below $14.43 will invalidate the bullish thesis for APE.
ApeCoin price ignored all the bearish signals during its ascent last week and hit a new all-time high after a constant uptrend. This rally was driven mainly by the mania of the Yuga Labs’ “Otherside” metaverse land sale, which required users to hold APE.
After the land sale concluded, ApeCoin price suffered a massive selling pressure as investors began offloading their tokens.
ApeCoin price provides a buying opportunity
ApeCoin price rallied 154% in ten days, starting on April 18. This run-up pushed APE from $10.80 to a new all-time high of $27.49. As mentioned above, this hype was driven by the metaverse land sale by Yuga Labs, which required investors to hold APE.
While this rally ignored the bearish divergences and set a new high, it was unsustainable. As a result, ApeCoin price dropped 48% to retest the $14.43 support level. Interestingly, the April 22 swing low at $13.69 and the current swing low at $14.20 have formed higher lows, suggesting that the uptrend is still intact.
Adding a tailwind to this bullish outlook is the Relative Strength Index (RSI), which has produced lower lows, indicating a hidden bullish divergence. This technical formation forecasts that the underlying asset’s value is set to rise.
Since ApeCoin price is hovering around the $14.43 support level, the uptrend narrative makes a lot of sense.
APE/USDT 4-hour chart
Denoting the mania phase of the Otherside land sale is the supply on exchanges metric. A spike in the number of APE assets held on centralized platforms is indicative of the investors’ sentiment and could serve as a sell-side pressure.
As of this writing, the number of APE tokens on exchanges increased from 31.51 million to 44.42 million over the last four days. This 40% uptick and its effect are already being seen in the ApeCoin price, which has dropped roughly 48% in the last week.
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APE supply on exchanges
If the decline continues and ApeCoin price produces a four-hour candlestick close below $14.43, it will create a lower low and invalidate the bullish thesis. This development could see APE drop to the $12.28 support level.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
