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Market structure and momentum favored the bulls. Given the importance of the looming resistance, a breakthrough on the first attempt could be unlikely.
ApeCoin has been performing well for the past few weeks and a breakout past the $6 level could be just a matter of time. Bitcoin also had a healthy outlook after recently passing the $22.5k resistance.
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A recent report highlighted a large positive value of the MVRV ratio and noted diminishing returns from APE staking. Still, public sentiment remained positive. At the time of writing, the price reached a resistance level from September. What can we expect in the coming weeks?
The $5.3 resistance was beaten, the next step was the $6 psychological area
In early September, ApeCoin saw big losses and was forced to visit the $4.18 level as support. On September 7, the price bounced off this level to reach $6 just two weeks later. After a few days of fierce skirmishing, the bulls were beaten back and the sellers retook control. They did not relinquish their vice hold until mid-November.
Realistic or not, here is APE’s market cap in terms of BTC
Therefore, there was a chance of rejection at this $6 resistance. It represented a psychological round number and the bearish reaction in late September paved the way for losses in October and well into November.
Therefore, APE was unlikely to break out above this level on the first try. A rejection at $6 followed by a pullback to the $5.3-$5.5 area was more likely. This could also force bears with a lower time frame into a false sense of security, while giving bulls some time to reap profits and prepare for the next march north.
The RSI formed a bearish divergence (orange), suggesting an overextended market and supporting the idea of a pullback. The earlier rejection at $5.25 was followed by a pull back to $4.5 where a hidden bullish divergence (orange dotted line) was followed by a sharp upward move. Therefore, risk averse bulls may wait for a retest of a significant support level and a hidden bullish divergence before buying APE.
Network growth complemented the explosive price action and the MVRV ratio climbed higher
Over the past two weeks, the network growth metric has seen significant spikes alongside price increases. This suggested that real demand and users supported ApeCoin’s rally. The age statistic used did not see any major peaks after those on January 11 and 12. This could mean that large numbers of the token were moved unhurriedly, which is sometimes followed by a selloff.
Due to the rising MVRV ratio, profits could soon be taken. Still, the $5.3 and $4.5 were key support levels that need to convert to resistance before the bears can claim the advantage on higher timeframes.
This post ApeCoin reaches a 4-month high, but this decisive resistance was not yet broken
was published first on https://ambcrypto.com/apecoin-reaches-4-month-highs-but-this-decisive-resistance-was-yet-unbroken/