The enthusiastic price rally of metaverse coin project ApeCoin (APE) in mid-March seems to have already been exhausted thanks to the coin’s 70% decline in value over the past two weeks, and it could drop further in April, according to
crypto analyst Yashu Gola.
APE price analysis: The probability of a decline towards the wedge target increased
At the center of this bearish view is a technical pattern formed by price consolidating upwards within a range defined by two converging ascending trendlines. indicates an ascending wedge. Yashu Gola continues his analysis: In a perfect scenario, rising wedges turn into a downtrend, confirming a definitive drop below the lower trendline that typically lowers the price by the height of the maximum wedge.
ApeCoin has been drawing a very similar pattern since March 18, as shown in the chart below. The metaverse coin recently broke below the lower trendline of its ascending wedge, placing itself close to the setup’s theoretical price target of $9, which is roughly 30% lower than the April 1 price.
APE daily price chart with a ‘rising wedge’ setup / Source: TradingView Meanwhile, the clear gap between rising prices and falling volumes over the past two weeks also indicates that the upside momentum is weakening. pointing out, increasing the probability of a drop towards the wedge target as discussed above.
Inflationary risks for metaverse coin
A bearish pattern is emerging as markets continue to look for clues about APE’s utility in the Non Fungible Token (NFT) and metaverse sector. Yuga Labs, the company behind the popular Bored Ape Yacht Club (BAYC) NFT collection, has printed 1 billion ApeCoins as the management tokens of its new decentralized autonomous organization (DAO). They then airdropped 10,000 APEs, corresponding to 15% of the total supply, to each BAYC NFT holder.
Meanwhile, APE was listed on some leading crypto exchanges including FTX and Binance on the same day, providing BAYC holders with ways to instantly liquidate APE rewards. APE rallied from around $1 to around $41 on its March 17 debut, but has since seen a strong correction. Ben Lilly, token economist at Jarvis Labs, voices his concerns about ApeCoin’s inflationary model that could undermine its valuation in the future. The Economist says that as Yuga Labs, the four BAYC Founders, 9.4 million APEs will likely enter the market each month over the next year and be able to unlock the allocated tokens.
APE supply table / Source: ChainPulse, Jarvis Labs 
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