The launch of ApeChain has led to a notable increase in ApeCoin (APE) value, with the token’s price rising by 100% over the past week. As ApeChain, a Layer-3 blockchain, goes live, this development has significantly impacted the price of ApeCoin.
However, while the initial excitement has driven prices upward, there are various factors that may affect whether this momentum can be sustained. This article explores ApeChain’s influence on APE’s price and key factors to consider moving forward.
ApeChain Launch and Its Impact on ApeCoin
The launch of ApeChain on 20 October 2024 marked a key event for ApeCoin. As a Layer-3 blockchain, ApeChain introduces cross-chain functionality, allowing users to transfer tokens such as APE, Wrapped Ethereum (WETH), USD Coin (USDC), Tether (USDT), and Dai (DAI) between Ethereum and Arbitrum networks.
This cross-chain capability has expanded the utility of ApeCoin, positioning it as a critical component within the Yuga Labs ecosystem.
ApeChain’s Layer-3 structure has garnered attention for its scalability and cross-chain integration, drawing interest from both retail and institutional investors.
Data from TradingView reported that APE’s price surged from $0.861 on 20 October to $1.75 within 24 hours, an increase of 104%.
Additionally, trading volumes spiked by over 250%, reflecting strong market interest in ApeChain’s integration.
One of the key factors contributing to this rise is the integration of LayerZero’s Omnichain Fungible Token (OFT) standard, which enables ApeCoin to be used across multiple blockchains.
This development has enhanced ApeCoin’s role as a governance token within the ApeCoin DAO, leading to increased demand for APE.
While this price increase has been significant, it is important to note that much of the current momentum may be driven by market enthusiasm. As ApeChain’s ecosystem continues to develop, the long-term impact on ApeCoin remains uncertain.
Market Signals Suggest Caution Despite Recent Gains
Although ApeCoin’s price has seen substantial growth, there are signs that suggest the rally may not be as sustainable as it appears. Whale investors, those holding between 1 million and 10 million APE tokens, have reduced their holdings over the past month.
Data from Santiment shows a decline in the number of whale wallets from 175 on 20 September to 166 by 20 October 2024. This trend indicates that large investors may be cautious about ApeCoin’s long-term price stability.
Whale behaviour can often provide insights into broader market sentiment. When large holders reduce their positions, it may suggest a lack of confidence in the sustainability of the recent price rally.
This reduction in whale accumulation points to the possibility that the surge is driven more by short-term market enthusiasm than by solid fundamentals.
In summary, while ApeChain’s launch has contributed to a significant rise in ApeCoin’s price, some indicators suggest the rally may not be sustainable in the long term.
The reduction in whale holdings and overbought price condition point to a potential correction, as most of the current volume seems to be selling volume.
Investors should be wary and closely monitor market conditions and developments around ApeChain to assess whether ApeCoin can maintain its current upward trajectory or face a price decline soon.
Looking more into the future, this does not mean that it is the end of APE’s surge, as most surges will need a correction from selling pressure to normalise it.
Going into the next bull market, there is a potential for this token to go up, but that is only if the development on Apechain is successful, and filled with ecosystem growth. For now, we can only monitor how the team will go after the launch.
