fxstreet.com
- ApeCoin price rose by 78% in the month of January.
- APE breached an ascending wedge pattern to the downside on January 30.
- Invalidation of the downtrend could occur from a breach above $6.41.
ApeCoin price shows subtle cues to suggest that a downtrend move could occur. The possibility of a liquidation event should not be ruled out moving forward.
ApeCoin Price showing a classical bearish setup
ApeCoin price displayed an impressive rally during the month of January, returning 78% of lost funds back into the hands of loyal investors. During the final two weeks of the month, the price began ascending in what appears to be an ending diagonal pattern. Such patterns are commonly found at the end of uptrends and are usually signs of an incoming market reversal.
ApeCoin price is currently trading at $6.07. On January 30, the ApeCoin price fell by 7%. The liquidation day produced a breach of the ending diagonal's supportive trendline, wiping out a previous swing low. Based on Elliott Wave theory and classical technical analysis techniques, the bears may already be in control of the trend, and a much larger decline could be on the way.
If this is the case, the origin point of the ending diagonal at $4.53 stands a fair chance of being liquidated in the coming days. The bearish scenario creates the potential for a 25% decline from ApeCoin's current market value.
APE/USDT 1-day chart
For those looking to enter the market, the safest bet would be to place an entry at the current swing low marked at $5.48 and an invalidation point above January's high at $6.41. The downtrend thesis would become void if the invalidation point is breached, and would likely catalyze a rally into the $7 zone, resulting in a 15% increase from the current ApeCoin price.