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With another 20% drop already in May, ApeCoin (APE) price appeared to be grinding toward its fourth consecutive month of decline. But recent swings in some critical on-chain metrics show signs of a possible bullish price reversal. But will investors buy into the positive ApeCoin price prediction?
ApeCoin (APE) is a utility and governance token of the famous Bored Ape Yacht Club (BAYC) NFT ecosystem. The recent downtrend in the global NFT markets has seen APE suffer three consecutive months of price decline.
But this week, an uptrend in trading activity across the ApeCoin network has given investors a glimmer of hope. Here’s why.
ApeCoin Sees Sudden Spike in Trading Activity
APE price is already down 20% this month. But in an interesting turn of events, there has been a dramatic uptick in the number of users trading on the ApeCoin network this week.
Between April 30 and May 10, the APE Daily Active Addresses skyrocketed by 100% from 1,251 to 2,502 active users.
The DAA metric tracks the number of unique wallet addresses interacting on a blockchain network. When it begins to increase during a price correction, it signals that the underlying project could be due for a bullish price reversal.
If Apecoin holders continue this trajectory, the bullish APE price prediction could soon gain momentum.
Unrealized Losses are Approaching Critical Levels
Moreover, on-chain data shows that holders could grow increasingly unwilling to sell APE due to unrealized losses.
As things stand, most investors that bought ApeCoin within the past month will make 17% losses if they sell at the current price of $3.25.
The MVRV data evaluates current token holders’ financial position to reveal their unrealized losses or profits. Based on the historical data above, investors last took such losses during the USDC-depeg panic sell-off in March 2023.
As MVRV declines to such levels, investors may look to hold until the ApeCoin price increases significantly to avoid huge losses.
This decrease in selling pressure and uptick in trading activity could combine to validate the bullish APE price prediction.
APE Price Prediction: All Eyes on $4
On-chain data shows that APE may decline slightly toward $3 before entering a bullish rebound toward $4. But, for the bulls to confirm their conviction in the positive price prediction, ApeCoin must first cross the $3.67 resistance.
At this resistance level, 7,000 beleaguered investors bought APE at an average price of $3.67 and could look to sell off some of their 87 million tokens.
If the bullish ApeCoin price prediction is validated as expected, APE could enter a prolonged rally to $4.03 before facing more significant resistance. Here, the largest cluster of buys averages just over the $4 mark and could pose some resistance.
Conversely, things could take a negative turn if APE price sinks below its initial support of around $3. However, the bullish support from 5,450 investors that bought 1.94 million tokens at an average of $3 could look to prevent the drop.
Although unlikely, failure to hold this support level could see ApeCoin price drop further toward $2.84. However with most APE holders now in the red, capitulation has likely already occurred.
This will offer a more bullish approach for investors looking to dollar-cost-average (DCA) back in, as well as possible new buyers who aim to get in relatively cheap compared to the majority of current APE holders.