- APE has seen increased volatility in recent days.
- This created bearish sentiment in the futures market, but OBV rose as a result.
ApeCoin [APE] fell 12.2% on January 18. Despite the losses, the market structure was unbroken. The drop to $1.31 was quickly bought, but is that a reliable sign of a bullish recovery?
This price drop came after a token unlock on January 17. Bitcoin [BTC] also fell from $42.9k to $40.6k, giving APE sellers more reason to sell their holdings.
The market structure indicated APE’s next direction
On January 17, APE closed a daily trading session above $1.53, turning the market structure bullish. The big price drop that followed a day later was not enough to break the bullish structure.
The previous higher low was marked by the red line and was $1.37. APE fell to $1.31, but did not close the day’s session below $1.37. Over the past three trading days, prices rose slightly to $1.4 at the time of writing.
Source: APE/USDT on TradingView
Despite the bullish market structure on the 1-day chart, the RSI was below the neutral 50. The value of 43 highlighted that the downward momentum was stronger. Conversely, the OBV has been trending higher since January 8.
The buying volume underlined by OBV was larger in the past ten days, consistent with the bullish market structure break. Therefore, if $1.37 is not broken, APE is likely to rise towards the next resistance at $1.57.
Evidence from the lower time frames encouraged the sellers
Source: Coinalyse
Realistic or not, here is APE’s market cap in BTC terms
After January 18, the CVD spot took a huge dive, wiping out the gains from the day before. At the time of writing, the downward trend continued. Moreover, Open Interest has also slowly decreased.
Together they pointed to bearish market sentiment in the near term. This should change if the bulls hope to stage a rally to $1.57 and higher.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.