Apecoin (APE) is experiencing a roller coaster ride in 2024. After falling to an all-time low of $1.01 in October 2023, the Bored Ape Yacht Club governance token has seen a dramatic turnaround, fueled by the strategic purchase of whales and a recent partnership with the Arbitration Network.
However, with a 13% pullback over the past two days and concerns about profit-taking lingering, questions remain as to whether the bulls will be able to defend key support levels and return the price to its former glory.
At the time of writing, APE was flashing green, trading at $1.73, which represents an increase of 0.6% and 7.5% in the 24-hour and weekly periods, Coingecko data shows.
APE price action. Source: Coingecko
Riding the Arbitrum wave
The turning point came on February 16, when Apecoin DAO voted to launch ApeChain, a dedicated blockchain, on the Arbitrum network. This partnership, aimed at addressing scalability issues and fostering ecosystem growth, caused a 21% increase in the price of APE, taking it to a six-month high of $1.90.
APE seven-day price action. Source: Coingecko
Whales hold firm, retail cashes in
On-chain data paints a fascinating picture of contrasting investor behavior. While retail investors and swing traders were quick to lock in profits after the rally, “whales” (those holding 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 large 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 conviction suggests long-term optimism about the project's potential.
Can the bulls hold the line?
Despite the bullish whale activity, a recent pullback has clouded the optimistic outlook. The price fell 13% in the last two days, testing the crucial support level of $1.50. A break of this support could trigger a further decline towards the $1 level. However, a large buying group at $1.50, representing 9,630 investors who bought APE at that price, could act as a major barrier to a deeper decline.
APEUSD trading at $1.66 on the 24-hour chart: TradingView.com
Eyes on $2, but obstacles remain
Technical analysis and market sentiment suggest a possible early rally towards $2 in the coming weeks. However, this depends on two key factors: defending the $1.50 support and overcoming new waves of profit-taking. Furthermore, broader positive developments in the nft sector could generate tailwinds for the APE price.
Looking beyond the immediate
congratulations to @apecoin DAO on their decision to develop ApeChain using the Arbitrum technology stack!
With $APE By serving as a gas and governance token for ApeChain, the customization of Arbitrum Orbit allows @ApeCoin DAO with true ownership and control over this…
– Offchain Labs (@OffchainLabs) February 15, 2024
While the partnership with Arbitrum and support for whales is encouraging, several obstacles remain. The broader macroeconomic climate, which still faces concerns over inflation and interest rates, could impact investor sentiment across the cryptocurrency market. Furthermore, ApeChain's success remains to be seen, and any unforeseen challenges could dampen enthusiasm.
With a potential $2 mark tantalizingly close, Apecoin faces a critical juncture. It remains to be seen if the bulls can overcome the immediate hurdles and propel the token to new heights, or if broader market headwinds and profit-taking prevail.
Featured image from Pexels, chart from TradingView
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