- ApeCoin price has been in a strong downward trend in the past few months.
- The volume of Bored Ape Yacht Club traded has been a bit low this year.
- The developers will unlock more than $187 million worth of tokens.
ApeCoin price has been in a strong bearish trend as concerns about NFTs in a high-interest rate environment remain. APE also retreated ahead of a major token unlock event that will happen in the coming week. APE was trading at $4.59 on Wednesday, sharply lower than the year-to-date high of $6.41.
NFTs in a high-interest environment
ApeCoin is a major cryptocurrency that was developed by Yuga Labs, a $4 billion company. Yuga Labs is best known for creating Bored Ape Yacht Club and Mutant Ape Yacht Club, two of the biggest NFT collections in the industry. Therefore, the token is closely associated with the performance of NFTs.
There have been concerns about whether risky assets that thrived in an era of easy monetary policy will do well as interest rates rise. Historically, risky assets tend to underperform in periods when interest rates are rising.
This explains why cryptocurrency prices underperformed in 2022. In that year, the Fed hiked interest rates by 400 basis points and implemented quantitative tightening (QT), which is the process of reducing its balance sheet.
Read more: How to buy ApeCoin.
The Fed has hinted that it is not done with hiking interest rates. In a statement on Tuesday, Jerome Powell said that the bank was increasingly concerned about high inflation. As such, he reiterated that the Fed will likely continue hiking interest rates in a bid to fight inflation.
Some analysts believe that NFTs will not survive in an era of high-interest rates. Besides, America’s 2-year bond yields have jumped to more than 5% and analysts see them reaching 6% this year. Other analysts, including Wes from Cude Design, who creates websites for NFT providers, believe that NFTs are here to stay. He expects that the industry will continue thriving in the coming years.
The next key catalyst for ApeCoin price will be the upcoming token unlocks that are scheduled for the next 8 days. APE tokens worth over $187 million or 4.1% will be released as part of its tokenomics. There now 2.84 billion APE tokens that are still locked in the network. Historically, crypto tokens tend to underperform ahead of a major unlock event.
ApeCoin price prediction
The 4H chart shows that the APE crypto price has been in a strong bearish trend in the past few weeks. It managed to move below the important support level at $4.74, which was the lowest level on February 13. The token has then moved below all moving averages while the MACD remains below the neutral level.
Therefore, ApeCoin will likely continue falling, with the next key level to watch being at $4. This price is about 13% below the current level. The stop-loss of this trade will be at $4.78.
