Recently, ApeCoin [APE] has demonstrated signs of a notable recovery following a bullish breakout from a descending channel pattern. After consolidating around the $0.54 level, APE experienced a significant push above its 20-day and 50-day Exponential Moving Averages (EMAs).
Analysis of the daily chart for APE/USDT showcased a distinct breakout from the descending channel that had been limiting its price movement since mid-July.
Short-Term Rebound and EMAs Intersect
Following the breakout from the descending channel, APE fluctuated between $0.5 and $0.7.
However, this breakout propelled the price above both the 20-day EMA ($0.732) and the 50-day EMA ($0.718), indicating a resurgence in buying activity. The crossing of the 20-day EMA over the 50-day EMA further confirmed the bullish trend.
Currently, ApeCoin is trading around the $0.78 level. Despite this bullish momentum, the $0.87 resistance could potentially hinder the ongoing rally.
It is important to note that the Relative Strength Index (RSI) has been showing higher highs over the last couple of months, while the price highs have remained stagnant.
This observation indicates a mild bearish divergence. If this divergence materializes, APE could be vulnerable to a temporary downturn with a likely retracement to retest the EMAs around $0.73.
Traders should be alert for potential rejection around the $0.87 mark, as a failure to surpass this level might trigger a short-lived correction.
The significant resistance area near $0.87 presents a considerable challenge for the bullish trend. A definitive breakthrough above this area could pave the way towards the 200-day EMA, situated close to $1.04 at the time of writing.
This target could become the next major objective for buyers. Further targets beyond the 200 EMA include the $1.12 and $1.35 levels; however, achieving these levels would require a substantial and sustained surge in trading volume.
Derivatives Data Unveils THIS
An examination of derivatives data revealed a healthy uptick in both trading volume (+14.61%) and Open Interest (+5.71%), with trading volume reaching $129.16 million and Open Interest at $44.11 million.
This increase suggests that traders are positioning themselves for potential market volatility, anticipating further price movements either towards or away from the critical $0.87 level.
Notably, the long-short ratio for APE/USDT on Binance accounts was 1.6455, indicating a prevailing bullish sentiment at the time of writing. Similarly, the long-short ratio for APE on OKX stood at 1.96.
Nevertheless, traders should diligently monitor both the sentiment in the derivatives market and the RSI for any signs of weakness.
As always, the broader market sentiment and developments within the blockchain ecosystem will also play a pivotal role in shaping the future price trajectory of ApeCoin in the days ahead.