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Going short on ApeCoin [APE]? You should read this before you trade

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Going short on ApeCoin [APE]? You should read this before you trade

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  • The price action of APE was limited within a rising channel
  • A possible breakout to the downside could send APE falling toward the 38.2% Fib level, or $3.412
  • APE saw a decline in Open Interest in the futures market 

ApeCoin [APE] fell below $3.954 after BTC lost $17.11k. It is worth noting that the price of APE was on a rising channel since 21 November, which is a typical bearish pattern.  

At press time, APE was trading at $3.874. Its sensitivity to BTC could lead to a bearish breakout if BTC continues its downtrend. In other news, APE will launch a pre-staking service on 5 December. 

APE chalked up a rising channel: Will the bears take control? 

Source: APEUSDT on TradingView

Over the past two weeks, APE’s price movement formed a rising channel with the highest point at the 100% Fib level ($4.483). At the time of publication, the price was moving in the lower range, approaching a possible breakout to the downside.  

In particular, the Relative Strength Index (RSI) moved down, out of the oversold territory, and fell below the neutral 50-level. This showed that buying pressure had steadily eased, and sellers may gain influence in the current market structure.  

The On Balance Volume (OBV) was also down, showing a decline in ApeCoin’s trading volume and demand. These indicators suggested that APE could trend downward, implying a possible downward breakout from the rising channel.  

In this case, the target for a downward breakout would be $3.412, based on the height of the rising channel. Moreover, additional support could be at the 50% and 38.20% Fib levels. 

However, a trading session close above the mid-point of the rising channel and the 78.6% Fib level ($4.134) would render the above bias null.

A decline in Open Interest

Source: Coinglass

According to Coinglass, APE posted a steep decline in open interest with the advent of December. However, it turned into a steady and smooth downward slope at the time of writing. This indicated that money had flown out of APE’s derivatives markets at the end of November.  

However, since 1 December, this outflow gradually decreased. Although this could be an indication of a declining bearish outlook in APE’s derivatives market, the structure is rather neutral, without a convincing and concrete direction.  

Therefore, APE short-term investors should closely monitor the performance of Bitcoin. Bearish sentiment in BTC could cause a downside breakout from the rising channel. However, a bullish stance in BTC will cause APE to move within the rising channel in the short term.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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