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ApeCoin retains its bullish short-term structure despite sharp plunge from $6.36

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ApeCoin retains its bullish short-term structure despite sharp plunge from $6.36
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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Bitcoin [BTC] saw nasty volatility the previous day and oscillated $1k within an hour from $18.6k to $19.7k. At the time of writing, the price of Bitcoin stood at $18.7k but the sentiment was quite fearful in the markets.

ApeCoin [APE] had a bullish bias, however, despite liquidating $3.6 million worth of positions within the past 24 hours. It has not yet ceded the support zone at $5.6 to the bears. Can the buyers continue to hold on, and even force some gains in the next day or two?

APE- 1-Hour Chart

ApeCoin retains its bullish short-term structure despite sharp plunge from $6.36

Source: APE/USDT on TradingView

The hourly chart showed the $5.63 level to be a crucial support level. On the four-hour chart, these lows formed over the past two days are the higher lows of the bullish structure. Hence, for the bullish bias to remain, the price must stay above the $5.48-$5.63 area. A drop below would flip the bias to bearish.

The Fibonacci retracement levels (yellow) drawn a few days ago were handy in plotting the 23.6% extension level for APE. The volatility of the past few days saw a move to $6.36 which was quickly sold off.

The ascending trendline support (light red) has confluence with the support zone at $5.6, and a bounce toward $6 could materialize once more.

Rationale

ApeCoin retains its bullish short-term structure despite sharp plunge from $6.36

Source: APE/USDT on TradingView

The indicators did not show much bullish ambitions. The Relative Strength Index (RSI) sank below neutral 50 and retested it as resistance to highlight growing downward momentum. The Accumulation/Distribution (A/D) line has crept higher since 19 August and APE bulls’ efforts were evident. Yet, it was unable to beat a local resistance level and was rebuffed yet again.

The Chaikin Money Flow (CMF) indicator was above +0.05 to show significant capital flow into the market over the previous day of trading. The overall picture, according to the indicators, did not really support another leg upward.

Conclusion

The $5.6 zone, if tested once more, could offer a buying opportunity. Given that these are also the higher lows from a higher timeframe bullish structure, it was logical to expect some support in this area. Invalidation would be a drop below $5.48, a mere 2% away from $5.6.

Therefore, despite the bearish stance of Bitcoin, a relatively low risk long position on ApeCoin could be considered, targeting $6.1 and $6.36.

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Akashnath S is a Senior Journalist and Technical Analysis expert at AMBCrypto. He specializes in dissecting price action, identifying key market trends through advanced chart patterns, and forecasting both short-term and long-term asset trajectories. His distinct analytical method is grounded in his academic training as a Chemical Engineer. This background provides him with a systematic, process-oriented approach to market data, enabling him to analyze the complex dynamics of financial markets with precision and objectivity. Having actively covered the cryptocurrency space since the landmark 2017 market cycle, Akashnath possesses years of experience navigating both bull and bear markets. This seasoned perspective is critical to his insightful reporting on market volatility and evolution. As an active market participant, Akashnath enhances his analysis with crucial, hands-on experience. This practical application of his technical skills ensures his insights are not merely theoretical, but are also relevant and actionable for an audience looking to understand and navigate trading opportunities. He is dedicated to educating readers on the nuances of technical analysis, empowering them with the knowledge to make more informed financial decisions.
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