ApeCoin (APE) price has rebounded to a three-month peak of $1.50 on Nov. 9, marking a 35% price bounce from 30-days ago. On-chain analysis examines the long-term sustainability of the ongoing ApeCoin price recovery.
ApeCoin investors remain unconvinced of a long-term recovery of the ecosystem despite the recent double-digit price gains. Is the APE price at risk of a major price reversal?
ApeCoin Futures Traders Have Continued to Fold Despite Price Rally
ApeCoin and other top NFT-related assets have attracted investor interest in the recent weeks amid the crypto market rally. After hitting an all-time low in mid-September, APE price has rebound toward the $1.50 area.
However, recent derivatives market data trends suggests a lack of bullish conviction among current APE investors.
Between Oct. 20 and Nov. 10, APE open interest has declined by a staggering 30% despite the double-digit price gains during that period. As seen in the Velochart below, APE aggregate open interest dropped from $55 million to $38 million, representing a $17 million (30%) decline.
ApeCoin (APE) open interest | Source: Velo Data
Open Interest represents the total value of active derivatives trading contracts for a particular asset. Typically, a decline in open interest during a market rally implies that reduced market participation and lack of conviction in the current price uptrend.
As more investors close out their positions than new market entrants, it could impact APE spot price negatively in the days ahead.
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Transactional Activity on Network Remains Flat
The current level of transactional activity on the ApeCoin network is another vital signal affirming that most investors remain unconvinced. As seen in the IntoTheBlock chart below, APE daily transactions have remained relatively flat since the crypto market bull rally began.
Since crossing 4,460 transaction on Sept. 27, APE daily transaction count has dropped significantly. As of Nov. 10, APE recorded only 2,020 transaction, more than 50% lower than the September peak.
ApeCoin (APE) Daily Transaction Count | Source: IntoTheBlock
The transactions count metric represent the total number of transactions conducted on the blockchain network within a daily time frame. Intuitively, a flat transaction count trend during a rally is a worrying signal. It suggests the ongoing APE price uptrend has not been accompanied by a comparable organic growth in network usage.
In summary, the persistent decline in ApeCoin open interest and flat transaction count both point toward an imminent bearish reversal.
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APE Price Prediction: Possible Retracement Below $1
Despite the recent price rally, on-chain data readings suggests ApeCoin investors appear unconvinced of a sustained recovery. Hence, APE price seems at risk of a potential retracement.
The Global In/Out of the Money data which groups all current APE holders by their entry prices also confirms this forecast. It however, shows that the giant buy wall at $1.20 could present initial support.
As shown below, 10,070 addresses bought 77.5 million APE tokens at the average price of $1.17. Considering the positive sentiment surrounding the crypto markets, APE could rebound from that range.
But if APE investors remain unconvinced, they could panic sell and trigger a larger retracement toward $1 as predicted.
ApeCoin (APE) Price Prediction, GIOM data | Source: IntoTheBlock
But on the flip side, the bulls could attempt to drive the ApeCoin price rally toward $2. However in this case, the bears will likely mount a sell wall at $1.5. At that zone, 1,100 addresses had bought 192.2 million APE at the maximum price of $1.50.
But if the bulls can flip that resistance level, an ApeCoin price upswing toward $2 could be on the cards.
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