In January, ApeCoin (APE) had an underwhelming performance compared to metaverse-based tokens like Decentraland (MANA) ir smėlio dėžė (SAND). APE gained 61% compared to the 90% and 150% respective gains seen in SAND and MANA. The subdued gains can be attributed to the hefty APE staking reward that is likely creating some selling pressure.
An upcoming unlock of around 9% of APE’s circulating supply in March, along with not-so-impressive fundamentals, will add further headwinds for the token. The gains in APE will depend on the success of the blockchain gaming projects in the ApeCoin ecosystem and new partnerships between Yuga Labs and big brands.
Traders take advantage of oversized APE staking rewards
ApeCoin DAO launched its APE staking mechanism in December. The APE staking pool yielded 90% annual returns in the first two months. Holders of the Bored Ape Yacht Club (BAYC) NFTs and related collections are eligible for twice the yields of around 171%, adding significant selling pressure for the token.
However, these traders are primarily interested in capturing risk-free APE gains instead of accumulating the token. They thus may eventually become a source of constant selling pressure.
The token has been heavily shorted in the futures market, especially after the launch of the staking mechanism. The funding rate for APE/USD perpetual contracts has been negative since December.
Otherside metaverse and Yuga Lab’s influence
Reportedly, players išleido 2 mln playing this game. While efforts like Dookey Dash are promising, it failed to generate considerable demand for the token. Most of the money was spent on the NFTs that gave access to the game.
Moving forward, the development and user engagement of the Otherside metaverse will determine the traction for APE’s usage.
APE will see significant token dilution in 2023
Besides the staking reward, the vesting schedule of APE adds additional dilution risk from unlocks of tokens allocated toward the team and investors. These include portions that are unlocked in one go and monthly releases.
On March 15, another 25 million tokens will be unlocked for launch contributors. Additionally, 8 million tokens allocated to Yuga Labs and the BAYC founders will be unlocked too. Around 8.90% of the supply will be unlocked immediately with additional monthly unlocks.
In 2023, the circulating supply of APE will nearly double, which could induce volatility in the token’s price. Usually, token unlocks mean supply dilution, which adds selling pressure. However, when many traders try to benefit from this plan, the market usually responds by moving to the upside first to wipe out the liquidity of short sellers.
The crucial support and resistance levels for APE/USD lie around $3.29 and $7.69, respectively. If either sellers or buyers can overcome these levels, it could amplify a move in the direction of the breakout.
Still, given the selling pressure staking rewards and upcoming token unlocks, with a lack of real yield or usage of APE, the path of least resistance looks to the downside.
Čia išsakytos nuomonės, mintys ir nuomonės yra tik autorių ir nebūtinai atspindi ar atspindi „Cointelegraph“ požiūrį ir nuomones. Šiame straipsnyje nėra patarimų ar rekomendacijų investuoti. Kiekvienas investicijų ir prekybos žingsnis susijęs su rizika, o skaitytojai, priimdami sprendimą, turėtų atlikti savo tyrimus. Source: https://cointelegraph.com/news/apecoin-leads-in-nft-and-metaverse-market-share-but-are-ape-s-hefty-staking-rewards-sustainable