Apecoin (APE) is on a rollercoaster ride in 2024. After falling to a low of $1.01 in October 2023, the Bored Ape Yacht Club governance token has experienced a dramatic turnaround, buoyed by strategic whale purchases and a recent partnership with the Arbitrum -network.
However, with a 13% decline in the past two days and continued profit-taking concerns, questions remain as to whether the bulls can defend key support levels and push the price back to its former glory.
At the time of writing, APE was flashing green, trading at $1.73, That’s up from 0.6% and 7.5% in the 24-hour and weekly time frames, Coingecko data shows.
APE price action. Source: Coingecko
Riding the arbitrage wave
The turning point came on February 16, when the Apecoin DAO voted to launch ApeChain, a dedicated blockchain, on the Arbitrum network. This partnership, aimed at addressing scalability issues and promoting ecosystem growth, led to a 21% increase in the APE price, pushing it to a six-month high of $1.90.
APE seven-day price action. Source: Coingecko
Whales are holding out, retail is losing money
On-chain data paints a fascinating picture of contrasting investor behavior. While retail investors and swing traders quickly locked in their gains following the rally, the whales – those who own at least 10 million APE tokens – have shown unwavering confidence.
Apecoin whale wallet balances up nearly 22 million tokens between Jan. 1 and Feb. 21. Source: Santiment
Since January 1, these major investors have acquired an additional 22 million APE tokens, representing a staggering $40 million investment and bringing their total holdings to 61 million APE. This unwavering belief indicates long-term optimism about the project’s potential.
Can the Bulls hold the line?
Despite the bullish whale activity, a recent pullback has cast a shadow on the optimistic outlook. The price fell 13% over the past two days, testing the crucial USD 1.50 support level. A breach of this support could trigger a further decline towards $1. However, a large buying cluster at $1.50, representing 9,630 investors who bought APE at that price, could pose a significant barrier to a deeper decline.
APEUSD trading at $1.66 on the 24-hour chart: TradingView.com
Eyes on $2, but hurdles remain
Technical analysis and market sentiment point to a potential early recovery towards $2 in the coming weeks. However, this depends on two key factors: defending the $1.50 support and overcoming further profit-taking waves. Additionally, broader positive developments in the NFT sector could provide support for the APE price.
Looking beyond the immediate
congratulations for @apecoin DAO on his decision to develop ApeChain using the Arbitrum tech stack!
Of $APE The customizability of Arbitrum Orbit, which serves as both a gas and governance token for ApeChain, allows @ApeCoin DAO with real ownership and control over this…
— Offchain Labs (@OffchainLabs) February 15, 2024
While the Arbitrum partnership and whale support are encouraging, several hurdles remain. The broader macroeconomic environment, which continues to struggle with concerns over inflation and interest rates, could impact investor sentiment in the cryptocurrency market. Furthermore, the success of ApeChain itself remains to be seen, and any unforeseen challenges could dampen enthusiasm.
With a potential $2 point tantalizingly close, Apecoin is facing a critical moment. Whether the bulls can overcome the immediate hurdles and propel the token to new heights, or whether profit-taking and broader market headwinds will prevail, remains to be seen.
Featured image from Pexels, chart from TradingView
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