ApeCoin (APE) caught its bulls off guard, with APE price shedding nearly 40% in just three days.
No Dutch auction
The price of APE reached its second-highest level, hitting $27.57 on April 28, up more than 2,650% from its debut in mid-March.
Nonetheless, traders began liquidating their positions after Yuga Labs, the creator of the Bored Ape Yacht Club (BAYC) NFT collection, released the details the coin of his Otherside Metaverse lands, called “Otherdeed”.
Yuga Labs announced that the NFT coin would cost a flat 305 APE (~$5,250 at today’s price), contrary to expectations that the company would sell the Metaverse land parcels in a Dutch auction. Therefore, disclosure may have reduced the need for people to hoard more ApeCoin tokens, leading to a drop in demand.
APE fell as low as $17 three days after Yuga Labs’ announcement.
Additionally, the sell-off accelerated due to Yuga Labs’ limit decision the minting of Otherdeed NFTs, starting with two NFTs per wallet for the first wave. This may also have helped reduce demand for APE tokens.
BREAKING: BAYC has sold over $100,000,000 worth of digital properties 45 minutes after launching their Otherside Metaverse.
— Watcher.Guru (@WatcherGuru) May 1, 2022
APE after dip a “good buy”?
ApeCoin serves as the primary settlement token for all Yuga Labs products and services. Additionally, it is a governance asset within “ApeCoin DAO”, a decentralized autonomous organization that gives APE holders the right to vote on community members’ proposals.
But the biggest benefit remains APE’s close association with Yuga Labs itself, a blue-chip startup whose valuation hit $4 billion nearly a year after its debut. So the hype surrounding the Metaverse land sales, all payable via ApeCoin, could absorb ongoing sales.
OpenSea, the world’s leading NFT marketplace, too announced on April 30 that it has started accepting APE for payments on its platform. Meanwhile, Yuga Labs has asked the ApeCoin DAO to hold a vote on whether APE could migrate from Ethereum to its own blockchain.
I just tweeted about this an hour ago. $APE needs its own chain. https://t.co/eagb4FH1Hr
— David Gokhshtein (@davidgokhshtein) May 1, 2022
Loma, an independent market analyst, signaled APE’s potential to bottom despite recent price drop, citing “interest and speculation” surrounding Otherside mint.
“The bear market dip buy of choice seems unironical $APE and the ecosystem that comes with it,” the analyst noted, adding:
“I think it will be a good buy once the mint hype dies down.”
ApeCoin techniques agree
APE’s recent sell-off has led its price to a support confluence, which is broken by its 100-4 hourly exponential moving average (100-4 hourly EMA; the black wave) and the 0.5 Fib line (around May 17). .29) of the Fibonacci retracement chart drawn from the $10.63 swing low to a near $24 swing high.
APE/USD has attempted to recover from this confluence, but lackluster volume suggests it would continue lower, with the 0.618 Fib line near $15.72 serving as the next downside target, more than 10% below that today’s course.
The level coincides with the 200-4H EMA (the blue wave) and the top of a so-called “demand zone” – the launch pad for APE’s previous 100% price rally.
Related: 2 key metrics point to further downside for the overall crypto market
Conversely, a rebound from the 100-4H EMA could see APE testing the 0.382 Fib line near $18.85. Accompanied by convincingly increasing volume, the price could test $20 and $24 as the next bullish targets.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
https://cointelegraph.com/news/apecoin-slides-40-in-three-days-despite-otherside-metaverse-land-sale-here-s-why ApeCoin Slips 40% in Three Days Despite Otherside’s Metaverse Land Sale — Here’s Why