ApeCoin [APE] traders willing to go short can make most of this pattern


Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Since attaining its all-time high (ATH) on 28 April 2022, the ApeCoin [APE] selling spree has kept the alt below its daily 20 EMA (red) and the 50 EMA (cyan). The recent streak of higher troughs and peaks registered a decent recovery. But the bears continued to display a robust rejection of higher prices.

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While a bearish flag setup flares up on the chart, sellers could extend the bearish phase in the coming sessions. At press time, APE traded at $4.4223, up by 4.12% in the last 24 hours.

APE Daily Chart

Source: TradingView, APE/USDT

Since taking a U-turn from the $27.6-resistance, APE has consistently registered lower peaks over the last two months. After recording an 88% decline from its April highs, APE was down to find an all-time low of $3.0661 on 15 June. Post this, the alt marked a rather bouncy recovery on the chart.

For over two weeks now, APE saw a bearish flag and pole in the daily timeframe. With the 20 EMA constricting the buying efforts, a compelling close below the current pattern can expose the alt to downside risk.

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To top it up, the volume trend was plunging during the formation of the flag pattern. This pattern generally performs well in such a declining volume trend.

A sustained close below the flag could aid the bearish efforts in retesting the $3.3-support. Post which, buyers would strive to refrain the sellers from finding fresher all-time lows. A continued pattern oscillation would likely see a reversal from the $5.6-zone.

Rationale

Source: TradingView, APE/USDT

The Relative Strength Index (RSI) has been hovering around in the bearish zone for two months now. A break below the 42-level could aid the selling endeavors to retest the $3.3-level.

Further, the Chaikin Money Flow (CMF) blended with the bearish outlook. Investors/traders should watch out for a potential break above this level to detect any bearish invalidations.

Conclusion

Looking at the bearish flag and pole setup alongside the price action falling below the 20/50 EMA, APE could see a patterned breakdown. The targets would remain the same as above.

Finally, investors/traders should factor in broader market sentiment and on-chain developments to make a profitable move.


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