- The unlock would release $16.74 million worth of APE.
- APE’s bearish trend, low MVRV ratio, and declining network growth caused problems for the token.
ApeCoin [APE] has faced its fair share of hardship in the recent, extended bear market. Unfortunately, more challenges loom on the horizon with a looming token unlock.
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New fears ‘unlocked’
This unlock, which is expected to release $16.74 million in APE, amounts to approximately 4.2% of the total supply. As with many token unlocks, there are both potential pros and cons that need to be addressed.
A token unlock can increase liquidity in the market. Additionally, token unlocks can lead to wider distribution of tokens.
Weekly Cliff Unlocks: October 16-23, 2023
4 tokens will be unlocked with a total value of $87.81 million
Highlights: $AXS
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(% of approx. supply)More detail : https://t.co/8XoTR8t40l pic.twitter.com/t8gT6yhPZY
— Token Unlocks (@Token_Unlocks) October 16, 2023
On the other hand, a large release of tokens can lead to an oversupply and a subsequent decline in value. Over the past three months, the price of APE has seen a significant decline, marked by a series of lower lows and lower highs, indicating that a bearish pattern has emerged.
Furthermore, the MVRV ratio for ApeCoin is currently hovering at a noticeably low level, meaning the majority of APE holders are in an unprofitable position.
A continued price decline could translate into more holders selling at a loss. This sentiment is reinforced by the fact that most holders are investing in short-term bonds, as evidenced by the shrinking gap between long and short. Typically, short-term holders are more likely to sell their holdings for a profit.
Source: Santiment
Digging deeper into the state of APE, network growth has taken a significant hit in recent months. This decline is indicative of waning interest from new addresses, which may reflect the broader decline in enthusiasm for the NFT sector over the course of this year.
Source: Santiment
Some positive points
Still, amid the apparent market lull, select Yuga Labs collections, most notably the Bored Ape Yacht Club, saw notable increases in their rock-bottom prices.
Realistic or not, here is APE’s market cap in BTC terms
The rising popularity of Yuga Labs’ NFTs offered a glimmer of hope for APE. If this trend continues, the APE token could potentially benefit from the renewed interest in NFTs.
Source: NFTGo
The upcoming token unlock, combined with APE’s bearish trend, raises legitimate concerns about its near-term future. Observing the token’s performance and the dynamics of the broader NFT market will be key to gauging which direction ApeCoin heads in the coming days.