Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- APE has a short-term bullish structure but the bulls could face rejection close to $1.6.
- Traders can look to long the token if the $1.63 level was breached.
ApeCoin [APE] rallied by close to 9% on Tuesday during the time the entire crypto market saw a bounce in prices. While the on-chain metrics gave divergent signals, the price charts showed that bears remained dominant.
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For ApeCoin, the higher timeframe market structure was firmly in favor of the sellers. The psychological $1.5 resistance has held firm over the past week. The Fibonacci extension levels have been respected so far, and showed a move toward $1.2 is likely.
A retest of $1.55 before another leg downward was a possibility APE traders can watch out for
In mid-August, ApeCoin fell from $2.216 to $1.66. A set of Fibonacci retracement and extension levels (pale yellow) was plotted based on this move. The bearish pressure over the past two weeks saw APE continue its descent below $1.66.
The 61.8% extension level at $1.37 was tested on 17 August when APE prices briefly dropped as far south as $1.345. In the two weeks since, the $1.5-$1.55 area served as support for a couple of days but was flipped to resistance on 21 August.
The OBV has been in a downtrend over the past week, even though the RSI climbed higher. The RSI has managed to rise above neutral 50, with a reading of 56 to denote a small amount of bullish momentum on the 4-hour chart. The market structure was also bullish, which suggested we could see a bounce for ApeCoin.
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The bulls have not escaped their predicament yet
Even though the market structure was bullish on the 4-hour chart, the $1.5-$1.55 region represented a strong technical resistance based on recent price action. MobChart data showed large limit sell orders worth 66.7k and 31k APE at $1.57 and $1.59 respectively ($98k and $46k).
Therefore, it was possible that buyers could face exhaustion in the $1.5-$1.6 region and bears could seize control of the market. This would see APE descent toward the 100% Fibonacci extension level at $1.194.