AI16Z – Potential Selling Pressure from Large Investors Could Drive Altcoin Prices Lower
AI16Z, an AI-driven project, experienced a remarkable 200% surge in the past fortnight after positive developments, such as the forthcoming Eliza agent launch in the first quarter of 2025. This digital asset is set to become the primary token within its ecosystem, featuring various means of value accrual.
Nonetheless, significant holders of AI16Z tokens, known as whales, have initiated profit-taking measures as reported by LookOnChain, an analytics company. In a recent update, the firm remarked,
“A sizeable investor offloaded all their 2.27 million $ai16z tokens valued at $4.77 million when the price hit $2.1, raking in gains of approximately $4.47 million (an impressive 1008% profit margin) on #ai16z.”
Notably, other big wallets with considerable unrealized profits also opted to take profits once the token surpassed the $2 mark on the 1st of January.
Can AI16Z Sustain a Price Above $2?
From late December, the AI-driven sector has been witnessing significant speculative activities and attention. Kaito highlighted that the AI narrative had reached nearly 60% of the overall market sentiment, marking a record high.
Leading AI projects, including AI16Z, benefited immensely from this newfound attention. Major exchanges like Binance capitalized on this trend by listing tokens such as AI16Z for trading on Futures Markets.
Starting from the 29th of December, the Open Interest (OI) for AI16Z surged from $1 million to over $80 million, representing an astronomical 8,000% increase. This surge indicated a massive speculative interest among Futures traders.
Furthermore, industry experts are predicting a continued dominance of AI technologies in 2025. Despite current criticisms of existing AI agents as glorified chatbots, it is anticipated that upcoming updates will introduce enhanced functionalities, including agent-to-agent transactions, within the next 6-12 months.
Currently, the most effective approach to participating in this trend is through agent launchpads like Virtual Protocol [VIRTUAL] and the AI16Z platform, which drives the Eliza ecosystem.
Nevertheless, with whales now beginning to cash out their holdings, there are concerns about the future outlook for AI16Z. Could this uptrend be in jeopardy?
According to the Trend-based Fibonacci Extension Tool (highlighted in yellow), the recent surge nearly reached the 2.618 level (around $2.5). Historically, robust uptrends tend to extend to the 2.618 level but often encounter resistance at the 3.618 level ($3.45). If this pattern holds, AI16Z could rally towards $3.45 upon breaching the $2.5 threshold.
On the flip side, heightened profit-taking by whales might pull the price back towards significant moving averages (MAs) such as $1.5 or even $1.0.