ApeCoin (APE) Price Rally and On-Chain Analysis
The ApeCoin (APE) price has surged to a three-month high of $1.50 on Nov. 9, representing a 35% increase from 30 days ago. Despite this, some ApeCoin investors are skeptical about the long-term recovery of the ecosystem. This raises concerns about a possible major price reversal for APE.
ApeCoin Futures Traders Have Continued to Fold Despite Price Rally
Even though ApeCoin and other NFT-related assets have garnered investor interest during the recent crypto market rally, data from the derivatives market suggests a lack of bullish conviction among current APE investors. Between Oct. 20 and Nov. 10, APE open interest declined by 30%, despite double-digit price gains during that period.
A decline in open interest during a market rally implies reduced market participation and lack of conviction in the current price uptrend, which could negatively impact APE spot price in the future.
Transactional Activity on Network Remains Flat
The level of transactional activity on the ApeCoin network has remained relatively flat since the crypto market bull rally began. Since reaching a peak on Sept. 27, daily transactions have dropped significantly, indicating that the ongoing APE price uptrend has not been accompanied by organic growth in network usage.
In summary, both the decline in ApeCoin open interest and flat transaction count indicate an imminent bearish reversal for APE.
APE Price Prediction: Possible Retracement Below $1
Despite the recent price rally, on-chain data readings suggest that ApeCoin investors appear unconvinced of a sustained recovery, indicating potential retracement risks. The Global In/Out of the Money data shows that there is initial support at $1.20. However, if investors remain unconvinced, panic selling could trigger a larger retracement toward $1.
On the flip side, if bulls drive the ApeCoin price rally toward $2, there will likely be resistance at $1.50 which could lead to an upswing toward $2 if flipped by bulls.
Hot Take: Impending Bearish Reversal for ApeCoin?
The recent surge in ApeCoin’s price seems to have left investors skeptical about its long-term sustainability given its on-chain metrics and derivatives market trends. As such, it appears that APE may be headed for a bearish reversal if current sentiment persists.
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