Investor confidence in the altcoin market appears to be in a slump lately, and the Aptos price performance succinctly reflects this sentiment. The APT token has struggled to achieve any sustained upward momentum since the turn of the new year.
After making a play above $10 in early January, the Aptos price has been in steady decline, falling to around $8 in the past week. Unfortunately, these performance woes for the APT token seem far from over, with the possibility of an even deeper correction on the cards.
The Reasoning Behind APT’s Potential 50% Correction
In a new post on the X platform, prominent crypto analyst Ali Martinez shared a worrying prediction for the price of Aptos over the next few weeks. According to the popular trader, the altcoin is currently in a bearish setup, putting its price at risk of a severe correction.
The rationale behind this bearish forecast is the formation of the head-and-shoulders pattern on the Aptos 12-hour chart. The head-and-shoulders formation is a pattern used in technical price analysis marked by three price highs, including a higher “head” set between two lower “shoulders.”
This chart formation usually signals a potential bearish reversal, indicating a possible shift from an upward price trend to a downtrend. This setup can be confirmed when the asset’s price breaks below the neckline, a trendline connecting the troughs (swing lows) between the head.
As highlighted in the chart above, the Aptos price has already established the right shoulder following rejection around the $10.5 mark. After testing the neckline — set around the $8 mark — in mid-January, the price of APT bounced back toward $9.5.
However, the price of Aptos seems to be approaching the neckline again. While there is no certainty that the neckline will give way this time, it is worth noting that the more times a price level is tested, the more it is likely to get breached.
According to Martinez, if the Aptos price successfully breaks and closes beneath the $8 mark, the altcoin could be at risk of a significant drop to $4.30. This would represent a nearly 50% decline from the current price point.
However, Martinez provided an alternative scenario for the price of Aptos. According to the crypto analyst, a sustained close above the right shoulder at $10.50 could be needed to invalidate the bearish outlook.
Aptos Price At A Glance
As of this writing, the APT token is valued at around $8.13, reflecting an almost 2% decline in the past 24 hours. According to CoinGecko data, the price of Aptos is down by more than 11% in the past week.
Source: NewsBTC