Here’s why APE could rise 18%

• ApeCoin price has validated a double bottom pattern, signaling a bullish move.
• On-chain data paints a bullish picture of rising APE open interest, negative exchange flow balance and falling stock supply.
• A daily candle close below $0.634 would invalidate the bullish thesis.

ApeCoin (APE) price double bottom formation on Monday and at the time of writing on Tuesday is trading at $0.847. This pattern signals a potential trend reversal favoring the bulls. In addition, on-chain data supports this bullish move, as APE’s rising open interest, negative exchange balance, and declining supply on exchanges suggest an increase in ApeCoin price.

ApeCoin price is set for a rally as it breaks out of a double bottom pattern

The price of ApeCoin rose and closed at $0.754 in late August after recovering from the $0.550 level. From early August to early September, it formed a W-like structure known as a double bottom pattern, which often signals a potential bullish trend reversal. On Monday, the price of ApeCoin closed above the neck at $0.754, and at the time of writing on Tuesday, it is trading at $0.847.

If the $0.754 level holds as support, APE could rise 18% from its current trading level to retest the July 1 high of $1.00.

This bullish thesis is supported by indicators such as the Relative Strength Index (RSI) and the Extraordinary Oscillator (AO) on the daily chart, both comfortably above their respective neutral levels of 50 and zero. These momentum indicators strongly indicate bullish dominance.

APE/USDT daily chart

Coinglass data shows that open interest (OI) of Apecoin futures on exchanges is also increasing. OI indicates the total number of outstanding derivative contracts that have not been settled (settled by delivery) and whether the cash flows in the contract are increasing or decreasing.

OI growth represents new or additional money entering the market and new purchases, suggesting an optimistic trend. When OI falls, it is usually a sign that the market is liquidating, more investors are leaving and the current price trend is ending.

The chart below shows that APE’s OI increased from $31.41 million on Saturday to $54.96 million on Tuesday, indicating that new or additional money is entering the market and new purchases are taking place.

APE Open Interest chart

Santiment’s exchange flow balance shows the net movement of APE tokens into and out of exchange wallets. A positive value indicates more tokens entering exchanges than exiting, suggesting selling pressure from investors. Conversely, a negative value indicates more tokens have left the exchange than entered, indicating less selling pressure from investors.

In the case of APE, the balance of exchange flow decreased from 4.59 million to -2.60 from September 2 to September 5 and from -47,190 to -1.8 million from Saturday to Monday. This negative growth indicates increasing investor confidence. The APE offer on the Stock Exchanges decreased by 6.16% in the same period. This is an optimistic development, further denoting investor confidence in ApeCoin.

APE Exchange Flow Balance and Supply on Exchanges chart

Despite the bullish thesis signaled by both on-chain data and technical analysis, the outlook will change to the downside if ApeCoin’s daily candlestick closes below the September 7 low of $0.634. This scenario could lead to a 13% crash to retest daily support at $0.550.