The ApeCoin price has followed a unique pattern. After soaring to an all-time high of almost $40, the coin has crashed to about $11.70. This means that APE has plummeted by about 70% from its all-time high. Its market cap has dropped to about $3.2 billion, making it the 46th biggest coin globally. It sits between Theta Network and Tezos.
Why has APE crashed?
There are several reasons why the ApeCoin price has gone through an unhinged meltdown in the past few weeks. First, the momentum that we experienced when it was launched initially has faded. Historically, this is what happens when hyped coins are launched. In APE’s case, it was launched and listed in key exchanges like FTX and Binance. We saw the same pattern form when Shiba Inu and Internet Computer were launched in 2021. This drop usually happens as initial investors liquidate their holdings.
Second, investors are still assessing ApeCoin’s role in the Non-Fungible Token (NFT) and the metaverse. Yuga Labs, the creator of Bored Ape Yacht Club (BAYC), has raised millions of dollars from venture capital firms to become a big player in the two industries. It is already a leading player in the NFT sector. Now, they are building a metaverse platform that will let people interact with each other virtually. While Yuga has had a lot of success before, it is too early to tell whether it will be successful.
Another reason why the ApeCoin price has retreated is that its inflationary tools appear a bit weak. In addition, as I noted in my last piece, there are concerns about the amount of concentration among APE insiders. Yuga Labs have been allocated millions of coins, which could be dangerous if they decide to dump them in the market. Still, a likely catalyst for the APE price is that Yuga Labs has a strong balance sheet, with over $450 million in cash, meaning that the developers can get better developers and artists.
ApeCoin price prediction
The APE price has formed a small descending channel shown in green. This channel has a close resemblance to a falling wedge pattern. A closer look also shows that its volume has dried up while its volatility has dropped. The Average True Range (ATR) indicator has crashed to an all-time low.
Therefore, while the ApeCoin price forecast is neutral, a strong rebound cannot be ruled out in the coming weeks. If this happens, the next key point to focus on will be $14.22. A drop below $10 will invalidate the bullish view.