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ApeCoin forms a bearish pattern, can APE traders anticipate a 5% drop soon?

ApeCoin forms a bearish pattern, can APE traders anticipate a 5% drop soon?

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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

ApeCoin [APE] experienced a falling August. It peaked at $7.8 in the first week of the month, but has been unable to turn the $7.5 level into support. Bulls were disappointed when APE turned south.

The altcoin lost almost 40% last month and had a market cap of $1.5 billion. If Bitcoin [BTC] sees no upside respite, pain may continue for APE investors. The formation of a descending pattern on the lower time frame also added weight to the probability of lower targets.

APE- 4 hour chart

Source: APE/USDT in TradingView

A descending triangle (white) was seen on the price chart of the APE/USDT pair. This happened after a few weeks of downward movement. A descending triangle pattern can see a breakout in either direction, but it often follows the direction of the previous trend.

In this case, the trend was down, so a move down seemed more likely. However, closing the session above $4.8 would nullify the bearish sentiment.

The Relative Strength Index (RSI) has failed to break above the neutral 50 on the four-hour chart, while the A/D indicator remained flat for the past couple of days. Therefore, the pace was neutral and slightly decreasing.

Market participants seem to be on the fence waiting for a strong move by APE. The volume bars at the bottom of the graph have also decreased, which meant that many participants were left out.

APE- 1 hour chart

ApeCoin is forming a bearish pattern, can traders anticipate a 5% drop soon?

Source: APE/USDT in TradingView

A descending triangle pattern presented a target of $4.4 for APE. Additionally, the $4.4-$4.35 range has been a support zone since July. Hence, a break below $4.67 could fall to find support in this zone.

A set of Fibonacci retracement lines (yellow) were drawn for the APE. It was based on swing highs and lows of $5.6 and $4.59. A 23.6% extension level was at $4.35, providing support at the $4.4 belt.

Conclusion

The formation of a descending triangle combined with ApeCoin’s downtrend over the past few weeks suggests that a 5% drop may soon materialize. A close of the H4 session below $4.67 can be entered into a short position targeting $4.4. The stop-loss can be set in the vicinity of $4.68-$4.7. A move below $4.59 would increase the likelihood of bearish pressure.

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