Ape Coin Price Momentum is at Risk Due to Decline in User Acquisition Rate

2023-08-08, 08:00

APE’s user acquisition rate has been decreasing within the last three weeks.

The APE coin may attain its lowest all-time-low if it enters a bearish period.

APE is a governance as well as a utility token for the APE eco.

Keywords: APE coin price, Ape coin crypto, Bored Ape Yacht Club, BAYC, APE price prediction

Introduction

When it was launched in March 2022, ApeCoin had a value of $8.54 but surged to $26.70 in April of the same year. At that time the value of Bored Ape was 152 ETH which was equivalent to $429,000. Now, more than a year after APE’s historic launch its value has decreased to around $2.00 and is showing signs of distress. In this article, we shall discuss the factors that are influencing the price of APE and its short-term price prediction.

APE’s User Acquisition Rate Decline

A week after the Ape coin price dropped to a new all-time low of $1.82 on 13 July its price rose above $2. Despite this small price rise, its declining user acquisition rate poses a threat as it is likely to deflate its bullish momentum.

In fact, its recent rally came after Ripple’s historic partial victory against the US SEC on 14 July. There are several factors that seem to hamper APE coin’s recovery effort. Basically, the decrease in its user acquisition rate is the greatest threat to its recovery mission.

As hinted above, the Ape Coin’s user acquisition rate has dropped to its three month all-time-low irrespective of its small price rise. Statistically, APE recorded 190 new wallet addresses on 25 July, which has turned to be its lowest since 29 May when it registered 176 new wallet addresses.

The new wallet address metric establishes the number of new users who have joined the network at a certain date. A sharp decrease in the user acquisition rate indicates waning interest in the token. Therefore, it is a sign of a decrease in the demand for the crypto asset. The following diagram shows the drop in the number of new wallets for Ape coin, recorded on 25 July.

A Decrease in APE’s User Acquisition Rate - Glassnode

As The Graph shows, there was a sharp decline in the number of APE’s new wallet addresses since 21 July. A slight increase in the number of new users on 24 July did little to change the direction of the trend.

The decrease in the user acquisition rate is worrisome as that may continue to affect the price of APE. This is because the existing users may not be able to absorb the increase in Ape coin crypto which has a monthly emission of about $30 million until 2026. Therefore, APE’s failure to attract new users yet its supply is increasing will create inflationary pressure.

APE Gets into Overbought Zone

Based on the Network Value to Transaction Volume (NVT) ratio APE is approaching the overbought zone. This follows its 300% increase from 13.03 to 52.72 as the following graph indicates.

Ape Coin (APE) Price Momentum | NVT ratio: Glassnode

Note that the the NVT ratio indicates the change in market capitalization against its network’s transactional activity. A rise in the NVT ratio indicates that the Ape coin price is based on speculation where its holders are protecting their positions rather than emanating from growth in transactional activity.

Considering the changes in its recent metrics especially the NVT ratio APE may get into a bearish trend soon.

APE Prediction: Approaching a New All-Time-Low

The greatest possibility at the moment is that the price of the APE coin may drop significantly unless a strong catalyst emerges. However, that is not a definite position since the APE bulls may react strongly against that.

As an example, the 1,680 wallets that acquired 2.8 million Ape coins at an average price of $1.90 may offer initial support, preventing its value from falling further. However, if they fail to mount a strong support base the price of APE may drop below $1.90, heading towards $1.50 which could become a new all-time-low for the crypto asset.

It is still possible that the APE bulls may push its price up again, targeting $2,50 which is the next strongest resistance level above $2.00. And more interestingly, its price may even shoot towards $3.00 within the next few weeks.

APE’s Current Price Performance

ApeCoin, ranked number 67 by market capitalization and with a trading volume of $29,805,454 within the last 24 hours, is trading at $1.78. Also, the coin lost by 2.17%, 9.6% and 13.6% within the last 24 hours, 7 days and 1 month respectively. The following graph shows the performance of APE within the last one month.

APE Price Performance for the Past 30 Days - CoinGecko

As the image indicates, APE performed well between 14 and 31 July. Sadly, it had a sharp price drop on 1 August. From that time, it has been ranging between $1.77 and $1.84.

Understanding the Ape Coin

Let’s briefly discuss what the APE coin is to enable you to understand its price action better. APE is a governance as well as a utility token for the Ape eco which is supported by Bored Ape Yacht Club (BAYC). As we know, BAYC is a collection of 10,000 unique non-fungible tokens.

The APE Foundation launched APE, an ERC20 token, on 17 March 2022. Apart from allowing its holders to make decisions pertaining to the development of the APE eco, the Ape Coin is a currency within the . It is also important to note that Yuga Labs, based in Delaware, United States, is the company behind BAYC.

Factors that Can Drive the Success of Ape Coin

There are several factors that can enable APE coin to perform favorably in the market. First, APE will be integrated into the Otherside Metaverse. This means that all transactions in this metaverse are carried out using the Ape coin which is likely to increase its demand. The metaverse may use it to reward the players

In December 2022, the DAO introduced the APE staking mechanism which attracted many investors. As many investors stake their APE coins its circulating supply will decrease which may influence its price to rise. However, the change in APE price depends on the relationship between the staked coins and the monthly issuance.

Conclusion

Within the last few weeks Ape coin’s user acquisition rate has been decreasing, something which may reduce its demand on the market. On the other hand, the monthly APE issuance coupled with a decrease in new users may create inflationary pressure on the coin. Therefore, it is more likely that the APE coin may enter a bearish period in the near future.

Does Ape coin have a future?

Ape coin is a cryptocurrency that powers the APE eco which consists of Bored Ape Yacht Club (BAYC). Since it offers much utility to a blockchain eco with different functionalities it is likely to maintain a stable value. Its price may increase as the demand for the blockchain products increases.

Is it good to invest in Apecoin?

Ape coin is one of the utility tokens as it drives an entire eco. Currently, it is within the top 50 top ranked cryptocurrencies showing that it has high demand and has a large community of investors and users. However, its success depends on the performance of Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC).

How much is Ape coin worth?

Ape coin, with a market capitalization of $655,491,261 is trading at $1.78 after gaining 0.53% within the last 24 hours. It attained its all-time high of $26.70 on 28 April 2022 and the market expects it to reach $2.05 by September 2023.

What is special about Ape coin?

APE coin supports a collection of valuable and highly demanded non-fungible tokens which include a collection of Bored Ape Yacht Club (BAYC). It is also listed on major crypto exchanges that include Gate.io.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.