Should ApeCoin holders continue to HODL

• ApeCoin holders face financial losses as 95% experience negative returns.
• Rising negative sentiment, declining network growth, and dominance of short-term holders pose challenges for ApeCoin’s price.

The Yuga Labs NFT collection has enjoyed significant dominance in the NFT market for quite some time. However, despite the immense interest surrounding these NFTs, ApeCoin has not witnessed a corresponding growth in its value. Recent data reveals potential challenges for ApeCoin and its holders.

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According to Pauly, the founder of NotLarvaLabs, an alarming 95% of ApeCoin holders find themselves in a state of financial loss.

While the prices have declined, the Yuga Labs team and launch contributors were observed rewarding themselves with substantial amounts of APE tokens through token unlocks. This behavior raises concerns about the perception of ApeCoin within the market.

Moreover, Santiment’s data indicated a substantial surge in negative sentiment surrounding ApeCoin in recent days. This sudden shift in sentiment could further impact ApeCoin’s price and market dynamics moving forward.

Analyzing the social aspect, it is noteworthy that social mentions and engagement for ApeCoin have seen an 18% and 51% increase, respectively, over the past week.

Although such popularity appears promising, when combined with the prevailing negative sentiment, it creates a challenging environment that might exert downward pressure on ApeCoin’s price.

One significant factor contributing to the decline in ApeCoin’s price was the diminishing network growth. Over the past three months, there has been a noticeable decrease in interest from new addresses regarding APE.

Additionally, the trading frequency of APE, as indicated by its velocity, has also experienced a decline during this period.

Interestingly, despite these challenges, whales continue to demonstrate interest in APE. This is evident from the growing percentage of APE held by large addresses.

While this may provide a temporary boost to ApeCoin’s price, it is essential to recognize the potential vulnerability of retail investors to the behavior of these whale investors due to the concentration of APE in their possession.

What does the future hold for APE?

As a result of the falling price, the MVRV ratio of APE has decreased, suggesting that many APE holders lack significant incentives to sell their holdings at the current juncture.

Additionally, the Long/Short difference indicates that short-term holders dominate the APE market, potentially leading to sell-offs once APE becomes profitable in the future.

Source: Santiment

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Given these circumstances, traders have maintained a bearish stance, with short positions surpassing long positions according to coinglass’ data. This sentiment reflects the prevailing concerns surrounding ApeCoin and its future trajectory.