Analysis

ApeCoin loses $2 support, is $1 impending?

APE’s supply on exchanges metric was in an uptrend. This showed increasing amounts of APE sent to centralized exchanges, likely to be sold

Published

1 year ago

on

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • The market structure and momentum were firmly bearish for ApeCoin on the daily timeframe.
  • The on-chain metrics showed the selling pressure behind APE has not slowed down.

ApeCoin [APE] investors have not enjoyed 2023 so far. After an 80% rally in January, APE prices began to reverse. The downtrend began in late February, and the bearish price structure persisted into August.

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The on-chain metrics from last week hinted at a lack of demand and were followed by losses for APE. The token fell below the long-term support zone at $2. Where can the bulls halt the flood of sellers?

The ApeCoin Fibonacci extension levels portrayed a bleak scenario

Source: APE/USDT on TradingView

In early June, ApeCoin saw a strong drop from $3.37 to reach $1.95. Based on this move, a set of Fibonacci retracement levels (yellow) was plotted. It showed the 23.6% and 61.8% extension levels sat at $1.618 and $1.076 respectively.

Hence, these are the levels that APE was expected to sink to next. On the 1-day chart, a bearish breaker block was highlighted by the red box. It was extended from $1.85 to $1.94.

The price fell below this region in recent days, and a retest could offer an opportunity to enter short positions targeting southward support levels.

The OBV has clung to a support level from mid-July, but further losses could signal strong bearish pressure. Meanwhile the RSI has been below neutral 50 since 19 April, showing bearish momentum.

The series of lower highs and lower lows on the chart indicated a downtrend was in progress.

The rapid drop in mean coin age did not bode well for buyers

Source: Santiment

The MVRV ratio was in negative territory, but was rising despite falling prices. This was not a good combination as it suggested that APE was decreasingly undervalued despite the downtrend, reinforcing bearish sentiment.

Realistic or not, here’s APE’s market cap in BTC’s terms

The mean coin age has also been falling since June, showing a lack of accumulation on-chain.

The supply on exchanges metric was in an uptrend. This showed increasing amounts of APE sent to centralized exchanges, likely to be sold. Overall, both the price action and the metrics support the bearish notion.

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