Three reasons why Aptos price rally could lose steam after 400% gains

Aptos witnessed a massive spike in its price since December 29, but on-chain analysts and experts suspect the token’s price rally could soon come to an end. The inflow of APT to exchanges increased, with nearly $20 million worth of Aptos hitting Binance on January 28. 

Aptos’ circulating supply is tightly controlled by 20 top wallets holding nearly 97.1%. This makes it likely that APT price gains are unsustainable. 

Also read: Is this the bullish signal that Ethereum holders are waiting for?

Kimchi premium and its role in Aptos price rally

Aptos price rally has earned the reputation of the “most hated crypto pump” on Twitter. Experts have weighed in on the issue, explaining that the token’s price has been manipulated by Asian traders. Ran Neuner, a crypto industry leader, highlights that APT trade volume on South Korean exchange Upbit is a clear sign of manipulation by traders. 

Aptos Foundation is gearing up to host its first global hackathon in Seoul on February 1. The massive price rally witnessed by APT is therefore a precursor to the event. Based on data from CoinGecko, Upbit accounts for 71.27% of APT trade volume as of January 31. 

Interestingly, APT price on Upbit is trading around 1% to 3% higher than the market price, which indicates high demand in the region, also termed as the Kimchi premium.

APT markets 

In the past 30 days, the APT trade volume on Upbit consistently accounted for more than 70% of the trading volume, highlighting the role of Korean exchanges in the Aptos price rally. 

On Upbit, the trade volume has surpassed $611 million, while on Binance, the APT/USDT pair is hovering around $327 million. The trading activity has therefore been considered dubious by crypto analysts. 

Why Aptos bulls could pump the brakes soon

The most interesting caveat of the recent pump in Aptos is the tightly controlled circulating supply of the asset. An on-chain analysis of Aptos wallet addresses – and the supply controlled by them – reveals top 20 APT holders control 97.1% of the token’s circulating supply. 

The circulating supply is limited to 161,133,088 while total supply is upwards of 1 billion. According to the APT token unlock schedule, nearly 85% of the supply is locked. 

APT locked tokens and circulating supply

Low circulating supply combined with high trade volume has created a combination of high volatility in APT price, according to Neuner. 

Top 20 APT holders

Large volume APT holders are taking profits in tranches

On-chain analysis unearthed a wallet address that received 128,627 APT from Binance when Aptos price was $7.82. The owner of the wallet transferred 60,100 APT to take profits when price rallied to $17.72. The wallet holds $1.2 million worth of APT as of Tuesday. 

Activity of wallet address that is taking profits on Binance 

Similar activity was observed in wallets transferring APT to Binance and taking profits. APT price rally could lose steam, with rising selling pressure and increase in Aptos reserves in exchange wallets. 

@lightcrypto, an on-chain analyst on Twitter, suspects that Aptos dev team wallet transferred $20 million worth of APT to Binance on January 28, with the intention of taking profits. 

$20 million worth of APT transferred to Binance 

Technical experts spot euphoria candles, caution traders

Crypto McKenna, a technical analyst and trader, warned traders that APT could enter the distribution phase after its massive pump. The expert refers to the Euphoria candlestick pattern seen in the chart as a sign of caution for traders opening a long position in the asset. 

A bullish Euphoria pattern is composed of three candles, with technical conditions where each candle is bigger than the previous one. When analysts see three consecutive growing bullish candles, where the second one is bigger than the first one, and the third candle is bigger than the second one, the “Euphoria” pattern is confirmed.

Comparing APT with SOL price rally

McKenna noted several similarities between the price rally observed in Solana in the beginning of 2023 and the recent pump in Aptos. The analyst recommends treading cautiously and exiting positions in APT before the “Euphoria candles are blown out.”