2023-9-2 21:13 |
ApeCoin (APE) price continued sliding this week as demand for Bored Ape Yacht Club (BAYC) dropped. The token also retreated to the lowest level on record as investors prepared for a major unlock.
Token unlock aheadApeCoin is a cryptocurrency that was launched by Yuga Labs in April 2022. Its goal was to power the Bored Ape Yacht Club NFT and metaverse ecosystem. Recently, the coin has lost momentum as demand for BAYC NFTs plunged.
Like other cryptocurrencies, APE has been in a steep downward trend as demand waned. This sell-off intensified after the Securities and Exchange Commission (SEC) delayed the ETF approval process, as I wrote here.
The other major catalyst for the sell-off is the upcoming token unlock event, which will happen on September 16th. According to TokenUnlocks, the developers will unlock more than 40.6 million APE tokens.
At the current price, these tokens have a market cap of over $56 million, which is 11.02% of the total market cap. Most of these tokens will go to Yuga Labs insiders. Tokens worth $3 million will be allocated to Yuga Labs founder.
Further, tokens worth over $36 million will go towards launch contributors and $5.75 million to Yuga Labs itself. This distribution shows that ApeCoin is highly centralized and mostly benefits the founder.
ApeCoin has been highly dilutive since it was launched. The developers have unlocked over 212 million tokens. Over 501.89 million tokens have already been unlocked. And according to its vesting schedule, the final tokens will be unlocked in June 2026.
Token unlocks are seen as being highly dilutive since they introduce more coins to the network. Most cryptocurrencies counter this by burning existing coins, which removes them from circulation. ApeCoin does not burn them.
Therefore, the falling demand for Bored Ape Yacht Club and the ongoing dilution makes it hard to recommend ApeCoin.
ApeCoin price forecastThe daily chart shows that the ApeCoin price has been in a strong bearish trend in the past few months. It recently managed to flip the important support level at $2.63 (November 14 low) into a resistance.
ApeCoin remains below the 50-day moving average while the Stochastic Oscillator has moved below the oversold level. The Relative Strength Index (RSI) is hovering slightly above the oversold point.
Therefore, the path of the least resistance for the APE price is bearish, with the next level to watch being $1.
The post ApeCoin (APE) price has more downside ahead of a $56M unlock appeared first on Invezz.
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