In the dynamic world of cryptocurrencies, Aptos’s APT token has become a hot topic of discussion. While some see potential in its recent AI partnership with Microsoft, others are questioning the fundamentals, especially in light of the upcoming massive token unlock.
Aptos APT Token Faces Market Turbulence Amid AI Partnership and Token Unlock
Originating as an offshoot from Meta’s (previously Facebook) crypto venture, Libra, Aptos launched its layer-1 blockchain platform on October 12, 2022. But the spotlight turned brighter when Aptos revealed its collaboration with Microsoft this week.
The partnership aims to utilize Microsoft Azure in rolling out innovative AI-backed blockchain tools. Their first joint venture? The Aptos Assistant chatbot, an AI solution designed to guide users and developers through blockchain inquiries.
Following the announcement, the APT token experienced a swift 17.5% price surge, peaking at $7.92.
Traders Express Doubts: The “Obvious Short” Movement
Despite the encouraging figures, the sentiment isn’t wholly positive. The APT futures‘ open interest (OI) volume reached a striking three-month zenith of over $160 million. This trend insinuates that the market is adopting a bearish stance on Aptos.
Furthermore, the term “partnership” has been a point of contention among crypto enthusiasts. Many argue that Aptos is merely purchasing a service from Microsoft, making the collaboration seem somewhat unilateral.
The criticism is mirrored in the trading activities as many are shorting the APT. Recent data suggests a robust short inclination, with the funding rate for perpetual swaps (futures contracts without an expiry date) taking a nosedive. The current negative uptick in the APT funding rate, paired with a spike in OI volume, signifies traders are countering the recent price uptrend.
It’s worth noting that assets that are heavily shorted often risk a “short squeeze“, a scenario where the asset’s price rises quickly, causing short sellers to buy back their positions.
The APT Token Unlock and What it Means for Investors
Adding another layer to the narrative is the impending token unlock event. Per Aptos’s token release schedule, come August 12, there will be an unlock of 4.54 million APT tokens, equivalent to $33.5 million – a significant 2% of the circulating APT supply. What’s reassuring for potential investors is that these tokens won’t flood the market right away, mitigating dilution concerns. Additionally, these tokens aren’t reserved for primary investors or key contributors. Instead, they’re earmarked for the Aptos community and its foundation.
technical challenges and tokenomics worries
However, a shadow looms over Aptos from its past. When its blockchain mainnet was unveiled, it was met with technical challenges and tokenomics worries. The good news? On-chain analytics firm Santiment hints at a brighter horizon for Aptos, alluding to a potential market uptrend given the increased trading volume and progressive development activities.
In conclusion, the trajectory of the APT token is anything but predictable. As Aptos navigates its partnership with Microsoft and the impending token unlock, only time will determine its ultimate market standing.
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