ApeCoin Investors Brace For Price Volatility Ahead Of 4% Supply Release
16 März 2023 - 10:00PM
NEWSBTC
ApeCoin, a decentralized cryptocurrency that operates on the
Ethereum blockchain, recently announced a 1-month linear unlock of
4% of its total token supply. The unlock event could cause
significant price volatility for the token, as some investors may
sell them in anticipation of a price drop. This could lead to a
sharp decline in the coin’s value. Related Reading: Galaxy Digital
CEO Recommends Buying Crypto And Bitcoin Amid US Credit Crunch
What’s Ahead For The ApeCoin Project? According to on-chain
research firm Unlocks Calendar, smart money wallets have reduced
their allocation balance in the cryptocurrency since their launch.
However, in the last 7 days, there have been transactions where
these wallets have increased their allocation balance, breaking the
previous trend. This type of transaction activity can indicate a
change in market sentiment or investor behavior, noting that smart
money wallets anticipate a price increase ahead of unlocking
ApeCoin’s 4% total token supply. According to Unlock Calendar, the
launch of ApeCoin’s staking program, ApeStake.io, could contribute
to the decline in ApeCoin balances on centralized exchanges since
December 2022. However, a positive sign for the research firm is
that this could also represent a general attitude of investors to
hold the token instead of dumping it. Previously, on February 16th,
4.3 million Ape coins were unlocked, worth about 0.7% of the total
supply. For investors, this could hint at the price action the coin
may suffer in the coming days, according to a blog post by trading
platform Gate.io. As a result of the February unlocks, the
price fell from $5.70 to $5.15 on February 17, just one day after
the unlock, representing a 7% drop in value. In addition, the
token’s price has continued to fall from the $5 level, and with the
upcoming unlock, APE investors can expect higher volatility and
lower prices. The next unlock event will take place in September
2023. However, many more ApeCoins will be unlocked periodically
until 2026. So why is the protocol unlocking these tokens now? The
Reason Behind ApeCoin’s Unlock The unlocking of tokens
increases the cryptocurrency’s circulating supply, which can cause
its price to plummet. However, many investors may consider holding
onto their tokens given ApeCoin’s staking program, which
incentivizes its users to hold the cryptocurrency for some time in
exchange for rewards. This may make them more attractive to
investors than selling them on exchanges, which could reduce the
amount of ApeCoins available on centralized exchanges. The decision
to release a portion of the total supply of tokens could be driven
by the need to provide market liquidity, fund development, and
expand the project. However, as noted above, this may lead to
massive selling pressure on Ape’s tokens and potentially drive down
the price. Over the past 24 hours, ApeCoin (APE) has increased its
price by 3.46%. On March 14, 2023, the cryptocurrency reached a
24-hour high of $4.66, while its 24-hour low was $4.022. The
cryptocurrency has a supply of 368.59 million APE coins in
circulation, with a maximum supply of 1 billion APE coins. APE is
currently ranked 40th in terms of market capitalization. Related
Reading: Bitcoin Leverage Ratio Plunges, Here’s What This Means
Featured image from Unsplash, chart from TradingView.com
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