Understanding ApeCoin’s Current Struggles
ApeCoin’s (APE) performance in the past 90 days has been quite disheartening for investors. This cryptocurrency, acting as the governance and utility token for the Bored Ape Yacht Club (BAYC), has seen a 27.65% drop within this period.
Despite positive trends observed in other market assets, APE failed to join the upward journey. The 4-hour chart reflects a short-lived attempt by the bulls to seize control of the market around June 5, ending a prolonged bearish reign. Intriguingly, a slight surge in demand pushed the price from $2.83 to $3.20.
Rejection and the Underlying Factors
Despite the momentary rally, APE faced a sharp rejection at the peak, according to Bollinger Bands (BB). This rejection is not necessarily due to an overbought asset state, despite high volatility. Instead, it may be attributed to a decrease in demand.
It’s worth noting that APE’s price hitting the lower volatility band at $2.83 could have triggered the recent rise. If the $3.20 price had reached the upper band of the BB, APE could be considered overbought. Therefore, the decline might be linked to quick profit-taking at this unexpected opportunity.
Bulls again tried to maintain the buying pressure at $2.99, but the bears were swift in snuffing out the effort.
APE’s Potential Downtrend and Market Sentiments
As it stands, APE holders might have to brace for a potential downward movement. The Relative Strength Index (RSI) approached a value of 30 after a brief back-and-forth between June 5 and 6. The current RSI value at 40.31 suggests a reduction in selling pressure.
Moreover, the Directional Movement Index (DMI) points towards an extended period of APE’s decline. At the time of writing, the -DMI (orange) stands at 26.63 while the +DMI (blue) is down to 18.47. This condition indicates sellers outpacing buyers. However, the ADX (red), an indicator to measure the directional strength, is at 21.82. Unless the ADX crosses the 25 threshold, the opportunity for buyers isn’t completely off the table.
APE’s challenges aren’t confined to price movements. The overall sentiment towards the token in the market has been pessimistic. According to Dune Analytics, the Month-on-Month (MoM) DEX volume has seen a significant drop since May 2022, making it challenging for the price to increase sustainably, impacting over 95% of token holders negatively.
