ApeCoin rebounds after APE cost crashes 80% in 2 days: Dead cat bounce or bottom?

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.

APE/USD versus USTUSD. Source: TradingView

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.

ApeCoin and Bitcoin daily correlation. Source: TradingView

Dead cat bounce?

ApeCoin’s rebound happened near what seems to become a strong tech support team level.

Related: ApeCoin is lower 70%+ because the Otherside launch — Can Yuga Labs turn the ship around?

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. 

APE/USD daily cost chart. Source: TradingView

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.

The views and opinions expressed listed here are exclusively individuals from the author and don’t always reflect the views of Cointelegraph.com. Every investment and buying and selling move involves risk, you need to conduct your personal research when making the decision.

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