ApeCoin Remains Bullish even though the Price Tanked Below $6

We will look into how the asset is maintaining its bullish outlook despite the significant drop over the last couple of days. First, we will look into what’s the function of ApeCoin in the crypto ecosystem. 

ApeCoin’s Functionality in Crypto Market 

A decentralized community growing at the forefront of Web3 is enabled and rewarded by APE Ecosystem using ApeCoin, an ERC-20 governance and utility token. Using the decentralized governance system that oversees the ApeCoin DAO, ApeCoin owners decide how to use the ApeCoin DAO Ecosystem Fund. The APE Foundation oversees the ideas adopted by ApeCoin users.

ApeCoin was modeled around Yuga Labs' decentralized Bored Ape Yacht Club idea. The ApeCoin DAO offers a framework for ApeCoin holders to communicate with one another through transparent governance processes in order to build and maintain the APE Ecosystem in a just and equitable manner.

Current Market Outlook 

On a short time frame ApeCoin remains bullish despite a significant drop below the $6 price mark. CoinMarketCap data suggests that the asset is trading around $5.7 with a registered loss of more than 5% in a day. Currently, the asset is holding the  31st market position based on market cap. However, it has lost more than 85% from its all-time high six months ago. Apecoin has been showing extreme volatility for the past seven days, but it has also gained more than 40% in daily trading volume. Looking at the volatility in $APE prices, we can say whales are active in the ecosystem. 

CoinMarketCap

Let’s look at several indicators and factors to find the trajectory of the ApeCoin.

 What’s Next For ApeCoin?

In the previous couple of days, Bitcoin saw extremely high volatility, fluctuating by $1000 in a single hour from $18.6k to $19.7k. The price of Bitcoin was $18.7k at the time of writing, but there was a lot of panic in the markets.

Despite selling $3.6 million worth of positions in the past day, ApeCoin (APE) has had  a bullish bias. The bears have not yet been granted control of the $5.6 support area. Can the buyers maintain their position for the foreseeable future and perhaps even force some gains?

ApeCoin remains Bullish in Lower Time Frame

The $5.63 level was identified as a critical support level on the hourly chart. These recent two-day lows are the higher lows of the bullish structure on the four-hour chart. Therefore, the price needs to remain above the $5.48–$5.63 range in order for the bullish bias to continue. The trend would change to negative if we fell below.

TradingView

The Fibonacci extension level for APE is easily plotted using the yellow Fibonacci retracement levels that were previously sketched. The climb to $6.36 was swiftly sold off due to the recent volatility. The support zone at $5.6 has convergence with the upwards trendline support, and another bounce toward $6 can occur.

Technical Indicators 

The indications did not indicate many bullish goals. In fact, the Relative Strength Index (RSI) fell below neutral 50 and retested it as resistance. Since August 19, the Accumulation/Distribution (A/D) line has slowly risen, reflecting the efforts of the APE bulls. But it failed to overcome a level of local resistance and was again rejected.

Compared to the previous trading day, the Chaikin Money Flow (CMF) indicator was above +0.05, indicating a substantial flow of capital into the market. The entire picture did not really support another leg upward.

Conclusion

If probed once again, the $5.6 area might present a buy signal. Given that these are also the higher lows from a bullish structure on a higher timeframe, it is reasonable to anticipate some support in this region. Invalidation would occur with a price decrease below $5.48, just 2% below $5.6. Therefore, despite Bitcoin's bearish outlook, a reasonably low risk long position on ApeCoin with targets of $6.1 and $6.36 remains possible.