(Filip L. – FXStreet)
– ApeCoin price slides below support as bears take over the crypto market.
– APE price trades heavily on Monday on new lockdowns in China.
– Price action could be set up for a 30% drop to $3.00
ApeCoin (APE) price action is undergoing a violent bearish breakout trade in what seemed to be a simple pennant formation. As bears are axing through two important supportive factors for the July rally, it becomes evident that such a rally is done. Expect to see a swing trade with price action dropping back towards the start of this rally, near $3.00, for at least a retest of the low of 2022, and in turn, evaporate almost 30% of build-up gains.
APE traders stand to lose their full July winnings
Apecoin price saw a shift in sentiment on Sunday after what appeared to be a rejection on Friday at the top line of a pennant formation. Clear evidence was found on Saturday, when bulls got smashed against the monthly pivot and could not make new highs or at least break above the high of Friday. Bears seized the opportunity as bulls were instead spending time at the beach than managing their trades, breaking through two essential supportive elements holding this rally together.
APE price first saw the supportive green trend line of the rally give way to the bearish pressure on Sunday, quickly followed by the monthly pivot near $4.90 as that level did not hold any ample support because it had been chopped already in the first days of July. As price action in ApeCoin now looks to be dangling above the abyss, the question is how quick or hard the landing will be towards $3.00. Expect to see some possible support from the double bottom at $3.95, though it is questionable if such an element could stand to catch a falling knife.
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Upside potential could still be there, although that would require a significant catalyst as price action would perform a knee-jerk reaction and pop back above $5.25 – preferably even $5.50 – between those levels, where the 55-day Simple Moving Average currently resides. To deliver a clear bullish signal to the markets, the catalyst breakout should pierce through these two technical hurdles. By doing so, Apecoin could trigger a 20% pop.
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