Aptos – What will the month of June bring exactly?

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

Aptos is a Proof of Stake blockchain that operates on the language Move, which is based on Rust. Its recent tweet highlighted the features of the latest Aptos release, Move 1.3. These features add value to the network. Moreover, other positive developments were seen too such as a rise in network activity and a decline in gas fees in recent weeks. Ergo, a look at Aptos Price Prediction makes a lot of sense.

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Read Aptos’s [APT] Price Prediction 2023-24

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Yet, as it very often happens, good news for users does not translate into price gains for the token itself. APT has been on a severe downtrend since February, although the last three weeks saw some stability around the $8-level. Can long-term investors look to get into the project again, or should they be wary of further losses?

Aptos was forced to retrace most of the gains it made earlier this year

Based on the rally in early 2023 from $3.06 to $20.4, a set of Fibonacci retracement levels (yellow) was drawn. It showed the 61.8% and 78.6% retracement levels to lie at $9.68 and $6.77, respectively. The area between these retracement levels is known as the golden pocket. This, because after retracing to either of these levels, there is a good chance that the asset would continue its former trend.

That might not occur instantly and the price could consolidate within or just above the golden pocket before another rally. Therefore, the $6.8-$9.7 area is one that investors with a longer investment horizon can keep an eye on.

From the perspective of price action, the trend was southbound. After the price slipped below the $16.3-level on 5 February, the market structure and trend flipped bearishly. Since then, APT has formed a series of lower highs and lower lows on the charts.

Since 9 May, this downtrend appeared to have been arrested. No new lows have yet been made. Moreover, the region where this occurred was especially interesting. The $7.6-$8.3 zone represented a bullish order block on the daily timeframe from 17 January.

Breach of the long-term support at $8.3 hands reins to the bears

When Aptos’ prices rocketed skyward in January, the bears forced a halt in the $8-$8.5 zone for a few days. If we go further back in time, the price action from late October shed light on why the $8.3-zone was an important resistance. Back then, APT fell below the $8.3-mark and retested it twice as resistance. The bulls faced rejection in this zone and when intense selling pressure arrived in November, Aptos was forced to sink lower.

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Now, APT is clinging to the same territory as support and so far, the bulls have managed to hold on. The RSI was well below neutral 50 and signalled strong bearish momentum in the market. Finally, the lower timeframe charts revealed that levels within this order block also had significance.

The 4-hour chart highlighted the inability of the bears to drive prices below $7.72 so far. It must be said that further losses look likely for APT. The range formation (orange) extended from $7.72 to $8.8, with the mid-point of the range at $8.26. This mid-point has confluence with a horizontal significant level at $8.33, from back in October and January.

It is not a good sign for the bulls that the prices were chopping about this crucial level over the past two weeks, as it indicated the bears had the upper hand even across lower timeframes. A look at the OBV confirmed this idea. The OBV has been in decline throughout May, even though APT prices have been relatively stable around the $8-mark.

Just like the daily timeframe, the 4-hour RSI also showed strong bearish momentum. The market structure of APT seemed bearish, but it is possible that the range lows could yield a minor bounce in prices.

The range highs at $8.8 and the $8.3-$8.5 stretch are two places that traders looking to short APT can watch out for. A retest of either and rejection on high volume can be used to enter short positions.

Meanwhile, the 4-hour structure would flip bullish upon a session close above $8.6. However, given the importance of the $8.8-zone, it is more likely that a move past $8.6 would only be a liquidity hunt and not a trend reversal.

Rising CVD suggested bearish bias could be mistaken

The 4-hour chart of Aptos on Coinalyze brought one surprising finding. It was highlighted in an earlier report and has not yet produced a bullish reaction. The discrepancy was with the spot CVD.

Open Interest has only risen marginally in the past two weeks when APT was trading within a range. This indicated speculators did not believe a clear trend was in progress. Meanwhile, the funding rate began to tick higher over the last few days. This suggested that the sentiment favoured buyers more, even though the price action across timeframes suggested otherwise.

The spot Cumulative Volume Delta has been on an uptrend since 12 May. This highlighted an increase in bids, although it wasn’t reflected on the OBV due to the way the indicators are calculated. Overall, while there is a chance APT could see a short-term reversal, it is unlikely. The evidence at hand apart from the CVD pointed towards a sustained downtrend, with the $8 and $7.6 levels likely to be extremely important in the coming days.