The article reports on the recent price performance of ApeCoin (APE), noting a rebound to a three-month peak of $1.50 on November 9, reflecting a 35% price increase over the past 30 days. Despite the positive price momentum, on-chain analysis is conducted to assess the sustainability of ApeCoin’s recovery and potential risks of a major price reversal.
ApeCoin Futures Traders’ Sentiment: The article highlights that ApeCoin investors, particularly in the derivatives market, appear unconvinced of a long-term recovery despite the recent double-digit price gains. Derivatives market data reveals a 30% decline in APE open interest between October 20 and November 10, from $55 million to $38 million. This reduction in open interest during a price rally is interpreted as a lack of bullish conviction, suggesting potential negative implications for the APE spot price.
Transactional Activity on the ApeCoin Network: The analysis extends to transactional activity on the ApeCoin network, indicating a flat trend in daily transactions since the crypto market bull rally began. The article suggests that the current level of transactional activity is a crucial signal, emphasizing that a sustained price uptrend should be accompanied by organic growth in network usage. The observed flat transaction count during the rally raises concerns about the strength of ApeCoin’s price uptrend.
Bearish Reversal Risk and Price Prediction: The article concludes by combining the insights from declining open interest and flat transaction count, suggesting an imminent bearish reversal for ApeCoin. Despite the recent price rally, on-chain data readings indicate that investors may be unconvinced of a sustained recovery, posing a potential retracement risk. The Global In/Out of the Money data is referenced to support the forecast, suggesting potential initial support at $1.20 and a possible retracement below $1 if investors remain unconvinced. The article also discusses the scenario where bulls attempt to drive APE price toward $2, highlighting potential resistance levels and buy walls.
Conclusion: In summary, the article provides a comprehensive analysis of ApeCoin’s recent price performance, combining on-chain metrics related to derivatives market sentiment and transactional activity. The focus on potential bearish reversal risks and price predictions contributes to a nuanced understanding of the current market dynamics for ApeCoin investors and enthusiasts.