Throughout the previous month, there was a sustained surge in the value of ApeCoin [APE]. However, in the recent day, this memecoin has experienced a drop in its price. The downward trend on the daily charts has sparked inquiries regarding the cause, with SpotonChain attributing it to dormant large holders.
Decrease in Apecoin Price as Inactive Large Holders Transfer Tokens
SpotonChain reported that inactive wallets associated with ApeCoin have moved 4.58 million Ape tokens, approximately valued at $5.22 million, to Wintermute Trading OTC.
Since the inauguration of ApeChain four days prior, three wallets connected to the ApeCoin distributor from 2022 have actively transferred their APE holdings. These wallets have collectively moved 12.47 million tokens, totaling $17.54 million, to Wintermute OTC.
Spotonchain’s analysis indicates that these transfers to exchanges have significantly contributed to the recent market adjustment.
What’s the Impact on APE?
Typically, when substantial wallets shift their assets to exchanges, it sparks speculation and selling pressure, leading to a decrease in prices. Consequently, within the last 24 hours, Apecoin has experienced a sharp decline in its market value.
Presently, Apecoin is trading at $1.17, marking a 9.86% decrease over the past day.
Before this drop, APE had been on an upward trend, surging by 64.08% over the week and 44.41% over the month.
Subsequently, the latest price movement indicates a switch in market sentiment from positive to negative, with sellers beginning to dominate the scene.
For instance, the amount of Apecoin held outside of exchanges has decreased over the past week, dropping from 866 million to 839.8 million Ape tokens since October 19th.
This suggests that holders are transferring their Ape assets to exchanges in preparation for selling.
This trend aligns with a rise in supply on exchanges, which has escalated from 134 million to 162 million Ape tokens.
Moreover, the number of daily active addresses associated with Apecoin has markedly decreased from 18872 to 985, indicating a dwindling demand and fewer investors engaging in trading activities. Consequently, investors may need a new catalyst to reenter the market.
In essence, Ape has undergone a change in market sentiment. This suggests that the gains seen on monthly charts were likely fueled by speculative trading following the introduction of ApeChain.
Since the speculative activity has waned, if this transformation persists, Ape could potentially see a further decline to $0.872. However, if it’s merely a corrective phase in the market, the memecoin might reclaim the resistance level at $1.35.