ApeCoin (APE) has experienced a significant tumble of -8% after facing rejection from upper-trendline resistance. This drop adds to the ongoing 9-month cascade, leaving many investors concerned about the future of ApeCoin. The decline in price is not an isolated event but is part of the wider disarray in the Bored Ape Yacht Club (BYAC) ecosystem, which has witnessed a substantial decrease in the value of its prestigious NFT collection over the past year. The collapse in the floor price of BAYC NFTs by -78% over the past 3 months has raised alarms. Additionally, trading volumes have decreased by -49%. The impact of this declining profitability on APE holders could potentially spell disaster.
At present, ApeCoin is trading at a market price of $1.163, representing a 24-hour change of -1.36%. This recent downside move follows a short-lived recovery for ApeCoin, which saw a +19% increase from the hard-fought consolidation at $1.089 to reclaim the 20-day moving average (20DMA) and test upper-trendline resistance. However, the resounding rejection has led to a significant drop back to 20DMA support. This support level is critical, as a failure to establish support here could trigger further cascading price action.
The 20DMA has acted as a capstone of resistance, suppressing upside price moves since August 15, indicating the risk posed by another drop below this moving average. On the positive side, ApeCoin’s indicators show some potential for upside momentum. The Relative Strength Index (RSI) is showing bullish divergence at 42.02, rapidly cooling down from the recent price increase. Additionally, the Moving Average Convergence Divergence (MACD) also displays bullish divergence at 0.024, indicating the presence of momentum to move higher.
Considering the current situation, ApeCoin faces a perilous retracement move. If the price continues to fall, it will once again be trapped by the 20DMA. However, if bulls can consolidate above this level, technical indicators suggest that upside momentum may resume. In terms of potential targets, APE could reach higher support around $1.445, implying a possible upside of +24.14%. On the other hand, downside risk could lead to a plummet to $1.017, indicating a potential decline of -12.63%. The risk-to-reward ratio for ApeCoin currently stands at 1.91, highlighting decent upside potential but also the possibility of grinding towards zero if price action fails to consolidate above the 20DMA.
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