ApeCoin appears to be on the brink of entering price discovery mode.
Key Takeaways
ApeCoin has risen by nearly 58% in the last two days.
The technicals now suggest that ApeCoin may see a brief spike in profit-taking.
Still, a sustained close above $17.20 could send APE to $20.
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ApeCoin has soared over the last few days, gaining more than seven points in market value. The gains could soon extend as speculation surrounding Bored Ape Yacht Club’s Otherside project mounts.
ApeCoin Posts Rally
ApeCoin is gaining bullish momentum. The red hot Bored Ape Yacht Club-affiliated token is approaching new highs.
APE has jumped by nearly 58% in the past two days, rising from a low of $10.90 to a high of $17.20. The sudden bullish impulse appears to be fueled by mounting speculation that Yuga Labs, the company behind the Bored Ape Yacht Club NFT collection, will use it as a currency for the sale of virtual land in its new Metaverse project, Otherside. Rumors have suggested that Otherside will sell plots of land in a Dutch auction format with bidding opening at 600 APE. A Twitter user known as renegademaster claimed that they had received information on Otherside’s drop mechanics in a tweet early Wednesday.
The development comes as Bored Ape Yacht Club, the breakout star of the 2021 NFT boom, continues to reign over the non-fungibles market. The current floor price for a Bored Ape NFT is just over 119 ETH, worth around $370,000, almost double that of the previous leading NFT collection, CryptoPunks. In March, Bored Ape Yacht Club all but cemented its dominance over the pixelated Punk characters when Yuga Labs acquired the collection’s intellectual property rights from Larva Labs for an undisclosed sum. It announced ApeCoin a few days after before revealing that Otherside would drop in April.
Although no details on ApeCoin’s potential utility for the Otherside sale have been confirmed, the asset has enjoyed a significant rise and looks to be positioning itself to enter price discovery mode. First, though, the token could briefly retrace to collect the liquidity it needs to surge to new highs.
The Tom DeMark (TD) Sequential indicator has presented a sell signal on APE’s four-hour chart. The bearish formation developed in the form of a green nine candlestick, anticipating a one to four candlesticks correction. A spike in profit-taking around the current price levels could help validate the short-term pessimistic outlook.
Slicing through the $15.60 support level could serve as the first sign of confirmation. If it falls below support, ApeCoin could retrace to $14.40 or even $13.70 before it rebounds and attempts to make new record highs.
Source: TradingView
It is worth noting that the short-term bearish thesis will likely be invalidated if ApeCoin prints a four-hour candlestick close above $17.20. Breaching the crucial resistance level could encourage sidelined investors to re-enter the market, pushing prices toward $20 or higher.
Disclosure: At the time of writing, the author of this piece owned ETH and BTC.
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