Reasons for ApeCoin dip
ApeCoin’s price reached second highest level in the run up to Yuga Lab’s Otherside metaverse land sales called the Otherdeed. The coin hit $27.57 on April 28, about 2,650% increase from its initial price.
Despite this initial bullish activities, the coin has lost about 40% in just three days. This is coming amid the much publicized Otherside metaverse land sales. What could be the reason for this abrupt change of fortune?
No Dutch Auction for Otherdeed
Traders initially expected Yuga Labs to sell the parcels in a dutch auction manner. But, the company revealed that the the NFT mint would be at a flat rate of 305 APE (approximately $5,250 at today’s price). This announcement by Yuga Labs reduced the demand for ApeCoin tokens. Because, traders were hoarding the token to participate in the dutch auction of the lands.
Minting Limits for Otherdeed.
The sell-off by traders heightened due to another decision by Yugal Labs. The decision was the limiting the minting of Otherdeed NFT to just two per wallet for a start. This is believed to have driven down the demand for APE tokens.
Despite the drop in the demand for APE. According to a report by WatcherGuru, BAYC sold over $100 million worth of digital real estate after the launch of the Otherside Metaverse.
Apecoin: To Buy The Dip or Not?
ApeCoin is the main payment token for all the products and services of Yuga Labs, more so, it is ApeCoin DAO‘s governance token. The DAO is a decentralized autonomous organization that furnishes holders with voting rights on the proposals put forth by community members.
The biggest plus for APE is it’s association with Yuga Labs which has proven to be a blue chip startup. The company has grown to a valuation of about $4 billion in valuation barely a year after it was founded.
Additionally, Opensea, thew World’s leading NFT marketplace announced on April 30 that it has started accepting APE as payment on its platform. There is also a vote on the decision to move APE from the Ethereum blockchain to its own.
According to Loma, an independent market analyst. The token has a potential of bottoming out despite the recent price dip. He also cited interest and speculation surrounding the Otherside mint as another factor.
The analyst also noted that:
“The bear market dip-buying of choice seems to un-ironically be $APE and related ecosystem, I think it’ll be a good buy once the mint-hype dies down.”