Before investing in ApeCoin, investors should consider the following factors.

ApeCoin [APE] has consistently dropped in price since reaching its All Time High (ATH) levels at the end of April this year. On the daily chart, the decline resulted in a trendline resistance (white, dashed).

A string of red candles resulted from the recent bearish pattern breakout. The price action was heading towards its immediate support zone of $4.2.

While the price fell below the EMAs, the sellers were favoured in the short term. At press time, APE was trading at $4.338, down 7.4% in the previous 24 hours.

 

Can APE buyers prevent a breakdown from its bearish pattern?

Source: TradingView, APE/USDT

After a significant decline of over 88% from its ATH levels, APE gravitated toward its All-time low on 15 June. Since then, the token strived to alter the bearish narrative but the seven-month trendline resistance constricted all buying efforts.

The recent recovery efforts translated into a bearish flag on the daily timeframe. The trendline resistance inflicted a reversal that eventually led to a breakdown. With the 20 EMA (red) and the 50 EMA (cyan) looking south again, the bears would look to control the near-term trend.

In the meantime, APE marked a descending triangle setup on its daily chart as the bears provoked lower peaks on flatter lows over the past few weeks.

A potential rebound from the $4.2 baseline can provoke an immediate pullback. In this case, the trendline resistance could restrict the bullish resurgence in the $4.8-$4.9 range. A close below the $4.7-level could expose the alt to a further downside. In this case, the sellers would look to inflict a further pull down toward the $3.6-$3.9 range.

The Relative Strength Index (RSI) declined below the equilibrium to depict an increasing bearish edge. Furthermore, the On-Balance Volume (OBV) lower peaks affirmed a bearish divergence with the price action. 

A decline in funding across all exchanges

Source: Coinglass

An analysis of APE’s funding rates revealed a slightly deteriorating sentiment in the futures market. On Binance and FTX, its funding rate was still negative and unveiled a slight edge for the sellers.

The buyers should look for a potential uptrend on this front to gauge the underlying investor sentiment before placing any calls. This analysis could aid in identifying a potential bearish invalidation.

Finally, investors/traders should factor in broader market sentiment and on-chain developments to make a profitable move.

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