ApeCoin (APE) has just shown signs of recovery after breaking out of a falling channel pattern. After consolidating around the $0.54 support level, APE saw a much-needed boost as it broke above both the 20-day EMA and the 50-day EMA. The daily chart of APE/USDT shows a clear breakout from the falling channel that has been trapped in since mid-July.
Short term recovery and EMA crossover
After breaking out of the downtrend channel, APE has been trading between $0.50 and $0.70. However, the breakout pushed the price above both the 20-day EMA ($0.732) and 50-day EMA ($0.718), indicating increased buying interest. The crossover of the 20 EMA above the 50 EMA further solidifies the bullish bias.
At the time of writing, ApeCoin is trading around $0.78. While the positive momentum is present, the $0.87 resistance level could stop this upside momentum.
It is worth noting that the relative strength index (RSI) has been hitting higher highs over the past two months, while the price action highs remain the same.
This indicates a weak divergence. If this divergence holds, APE could face a temporary downtrend, with a potential pullback to retest the EMAs around $0.73.
Traders should watch for a reaction at $0.87, as a failure to clear this level could trigger a short-term correction.
The key resistance zone around $0.87 is posing a challenge for investors. A decisive break above this zone could open the way towards the 200-day EMA, which is currently sitting at around $1.04.
This would be the next big target for buyers. After the 200 EMA, $1.12 and $1.35 could also be considered, but this would require a strong and sustained increase in trading volume.
Futures data reveals this
Looking at the futures data, we see a strong increase in both volume (+14.61%) and open interest (+5.71%), with $129.16 million in volume and $44.11 million in open interest.
This suggests that traders are preparing for potential volatility, perhaps expecting further price action to either move higher or pullback from the $0.87 level.
Notably, the APE/USDT account long-short ratio on Binance is 1.6455 at the moment, reflecting that the market sentiment is more bullish. Similarly, the APE long-short ratio on OKX is 1.96.
However, traders should keep a close eye on futures market sentiment and the RSI to spot signs of weakness.
As usual, broader market sentiment along with on-chain developments will also play a key role in shaping ApeCoinâs price trajectory in the coming days.
