Recently, ApeCoin [APE] has shown signs of a recovery following a bullish breakout from a descending channel pattern. The token consolidated around the $0.54 support level before experiencing a significant push above the 20-day and 50-day Exponential Moving Averages (EMAs).
On the daily chart of APE/USDT, a clear breakout from the descending channel that had been constraining its price movement since mid-July was evident.
Potential for Short-Term Recovery and EMA Cross Moving Average Crossover
Following the breakout from the descending channel, ApeCoin has been fluctuating between the $0.5 and $0.7 range.
The breakout led to the price surpassing both the crucial 20-day EMA ($0.732) and the 50-day EMA ($0.718), indicating a renewed interest in buying pressure. Moreover, the crossover of the 20 EMA above the 50 EMA further confirmed the bullish trajectory.
Currently, ApeCoin is trading around the $0.78 level. Despite this positive momentum, there might be resistance around the $0.87 mark that could impede the ongoing rally.
Notably, the Relative Strength Index (RSI) has been making higher highs over the last couple of months, unlike the price action, which has remained relatively stable. This divergence indicates a mild bearish signal, suggesting a potential temporary downtrend. In such a scenario, APE might see a pullback to retest the EMAs around $0.73.
Traders need to observe closely for any rejection near the $0.87 resistance level as a failure to break above it may lead to a short-term correction.
The crucial resistance region around $0.87 poses a significant challenge for bullish momentum. A decisive break above this zone could pave the way towards the 200-day EMA, situated around $1.04 currently.
Subsequently, the next significant targets for buyers could be at $1.12 and $1.35, contingent upon a substantial and sustained increase in trading volume.
Insights from Derivatives Data
Analysis of the derivatives market data reveals a healthy uptick in both trading volume (+14.61%) and Open Interest (+5.71%), with volumes amounting to $129.16 million and Open Interest at $44.11 million.
This increase signifies that traders are positioning themselves for potential volatility, anticipating further price movements either towards or away from the $0.87 threshold.
Of particular interest is the long-short ratio for the APE/USDT pair on Binance, which currently stands at 1.6455, indicating a more bullish sentiment among traders. Similarly, the long-short ratio on OKX for APE also reflects a bullish sentiment at 1.96.
Nevertheless, it is essential for traders to monitor closely the sentiments in the derivatives market and the RSI for any indications of weakness.
As always, the broader market sentiment and developments happening on-chain will continue to be influential in the price trajectory of ApeCoin in the upcoming days.