APE price could see more downside in the coming days as the Otherside hype cools down.
ApeCoin (APE) caught its bulls off-guard with APE price losing nearly 40% in just three days.
No dutch auction
APE’s price reached its second-highest level, hitting $27.57 on April 28, up more than 2,650% from its mid-March debut.
Nonetheless, traders started unwinding their positions after Yuga Labs, the Bored Ape Yacht Club (BAYC) NFT collection’s creator, released the details of the mint of its Otherside Metaverse lands, dubbed “Otherdeed.”
Yuga Labs revealed that the NFT mint would cost a flat 305 APE (~$5,250 at today’s price), in contrast to expectations that the company would sell the metaverse land parcels in a dutch auction manner. Thus, the disclosure may have reduced the need for people to hoard more ApeCoin tokens, leading to a drop in demand.
APE dropped to as low as $17 three days after the Yuga Labs’ announcement.
Additionally, the selloff accelerated due to Yuga Labs’ decision to limit the minting of Otherdeed NFTs, starting with two NFTs per wallet for the first wave. This may have also played a role in driving down demand for APE tokens.
BREAKING: BAYC has sold over $100,000,000 worth of digital real estate 45 minutes after launching their Otherside Metaverse.
— Watcher.Guru (@WatcherGuru) May 1, 2022
APE a “good buy” after dip?
ApeCoin serves as a primary settlement token for all the Yuga Labs’ products and services. Additionally, it is a governance asset within “ApeCoin DAO,” a decentralized autonomous organization that gives APE holders the right to vote on the proposals made by community members.
But the biggest takeaway remains APE’s close association with Yuga Labs itself, a blue-chip startup whose valuation reached $4 billion almost a year after its debut. So, the hype surrounding its metaverse land sales, all payable via ApeCoin, could absorb the ongoing selling.
OpenSea, the world’s leading NFT marketplace, also announced on April 30 that it has started accepting APE for payments on its platform. Meanwhile, Yuga Labs has requested the ApeCoin DAO to hold a vote on whether APE could migrate from Ethereum to its own blockchain.
— David Gokhshtein (@davidgokhshtein) May 1, 2022
Loma, an independent market analyst, signaled APE’s potential of bottoming out despite its latest price dip, citing “interest and speculation” surrounding the Otherside mint.
“The bear market dip-buying of choice seems to un-ironically be $APE and related ecosystem,” the analyst noted, adding:
“I think it’ll be a good buy once the mint-hype dies down.”
ApeCoin technicals agree
APE’s latest selloff has led its price to a support confluence defined by its 100-4H exponential moving average (100-4H EMA; the black wave) and the 0.5 Fib line (around 17.29) of the Fibonacci retracement graph drawn from $10.63-swing low to nearly $24-swing high.
APE/USD has been attempting to rebound from the said confluence, but lackluster volumes indicate that it would continue falling deeper, with the 0.618 Fib line near $15.72 serving as the next downside target, down over 10% from today’s price.
The level coincides with the 200-4H EMA (the blue wave) and the top of a so-called “demand zone” — the launchpad for APE’s previous 100% price rally.
Conversely, a rebound from 100-4H EMA could have APE test the 0.382 Fib line near $18.85. Accompanied by convincingly increasing volumes, the price could test $20 and 24 as the next bullish targets.