ApeCoin (APE) has gone through a clear, crisp recovery after falling to the cheapest level in 2 several weeks. Nevertheless its strong correlation with Bitcoin (BTC) and U.S. equities among macro risks suggests more losses might be available.
APE rebounds after 80% losses in 2 days
APE rebounded by nearly 45% to $7.30 on May 12. The upside retracement move came after APE dropped circa 81% to $5 on May 11, from the record high near $27.50, established on April 28.
The seesaw cost action mirrored similar volatile moves elsewhere within the crypto market, brought through the chaos around TerraUSD (UST) — an “algorithmic stablecoin” whose value stepped to $.23 the 2009 week, and also the Federal Reserve’s hawkish reaction to rising inflation.
Meanwhile, the correlation coefficient between ApeCoin and Bitcoin has become around .90, suggesting it’s buying and selling nearly together with BTC, which is testing multi-year lows.
Dead cat bounce?
ApeCoin’s rebound happened near what seems to become a strong tech support team level.
Particularly, APE is holding above $5.82, which coincides using the .786 Fib type of the Fibonacci retracement graph sketched in the $.97-swing low towards the $23.65-swing high. Meanwhile, the token’s daily relative strength index’s studying is simply above its “oversold” threshold degree of 30 — a buy signal.
Therefore, a rebound change from the $5.82-support might have APE test $9.63 (the .618 Fib line) since it’s near-term upside target.
On the other hand, a long breakdown underneath the support would risk crashing the APE/USD pair into unchartered cost territory, confirming that it is retracement move would be a mere dead cat bounce.
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