- The price action of APE was limited within a bullish channel
- Possible break to the downside could send APE lower towards 38.2% Fibonacci level, or $3412
- APE has seen a decline in open interest in the futures market
ApeCoin [APE] It fell below $3.954 after BTC lost $17.11K. It is worth noting that the price of APE has been moving in an ascending channel since November 21, which is a typical bearish pattern.
At the time of writing, APE is trading at $3,874. Its sensitivity to bitcoin could lead to a bearish breakout if BTC continues its bearish trend. In other news, APE will release a Pre-stocking service on December 5th.
APE Formed an Uptrend Channel: Will the Bears Take Over?
Over the past two weeks, APE price action has formed an ascending channel with the highest point at the 100% Fibonacci level ($4,483). At the time of publication, the price was floating in the lower band and approaching a potential breakout to the downside.
In particular, the relative strength index (RSI) moved lower, out of the oversold zone, and fell below the neutral level of 50. This showed that buying pressure has been steadily declining and sellers can influence the current market structure.
On-balance volume (OBV) has also decreased, which indicates lower trading volume and demand for ApeCoin. These indicators indicate that the APE indicator may head lower, which indicates the possibility of a bearish breach from the ascending channel.
In this case, the target for the downside breakout will be $3,412, based on the height of the ascending channel. Also, more support could be at the Fibonacci levels of 50% and 38.20%.
Closing the trading session above the midpoint of the ascending channel and the Fibonacci level of 78.6% ($4,134) will make the bias above zero.
decrease in open interest
According to Coinglass, APE recorded a sharp drop in open interest as December rolled around. However, it has turned into a steady and even ramp at the time of writing. This indicates that funds exited the derivatives markets in APE at the end of November.
But since December 1, this flow has gradually decreased. While this may be an indication of fading bearish expectations in the APE derivatives market, the structure is completely neutral, without a convincing and tangible trend.
Therefore, short-term APE investors should closely monitor Bitcoin’s performance. Bearish sentiments in Bitcoin may cause a bearish breakout from the ascending channel. However, the bullish stance in Bitcoin will cause the APE to move within the ascending channel in the short term.