Analysis
ApeCoin reaches a stiff resistance zone, should traders look to go short
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
- ApeCoin has been bullish in the past two weeks
- It reached a higher timeframe resistance zone near $4.5, can the bulls break above it?
ApeCoin [APE] has performed well in the markets in the past ten days. It flipped the $3.2 area from resistance to support on 25 November and posted a 39% surge over the five days that followed. Since then, APE saw a pullback to $3.88.
Read ApeCoin’s [APE] price prediction 2023-24
As mentioned in a previous article
, ApeCoin saw significant resistance in the $4.2-$4.5 region. Open Interest behind the asset leaped upward as the price rallied past the $3.2 mark, but has waned somewhat in the past few days. On shorter timeframes, APE continued to have a bullish bias.The 12-hour bearish breaker looms large as bulls try to advance past $4
Source: APE/USDT on TradingView
On the lower timeframes, ApeCoin had neutral to bearish momentum in the first couple of days of December. Only on 5 November did APE begin to see a renewed push from the buyers to drive prices past $4.2.
The region highlighted by the red box on the price chart represented a 12-hour bearish breaker formed on 2 November. It was a bullish order block at the time, but it was broken by the decisive selling on 8 November.
Since then it has represented a region of strong resistance. APE faced a rejection there on 30 November. ApeCoin slid from $4.47 to $3.78 on December 2. This bearish breaker also has confluence with the 61.8% and 78.6% Fibonacci retracement levels (yellow).
Bitcoin has resistance in the $17.6k-$18k region also. It was unclear how BTC or APE might move in the coming days. But, a rejection from the $4.2-$4.5 region was a possibility. The $4 mark was important psychologically. It was also a significant liquidity pocket in the past week.
Hence, a drop below it and a subsequent retest can offer a selling opportunity. Meanwhile, buyers can wait for a breakout past $4.6 and a retest of the $4.5-$4.6 region before looking to get in.
Open Interest is on the rise once more alongside the price
Source: Coinglass
From 19 November till 30 November, the Open Interest was in an uptrend. The price of ApeCoin was also in an uptrend in the same period as APE appreciated from $3.15 to $4.4. This showed that buyers were quite confident in the asset despite the market conditions in recent weeks.
Early December saw the OI flatted as APE dropped to $3.88. At press time, both the Open Interest and the price were in an uptrend once more. This suggested the likelihood of further gains. Yet, buyers must be cautious due to the higher timeframe resistance present at $4.5.
