ApeCoin Soars 50% Following ApeChain Launch, Major Liquidations Expected

ApeCoin has surged 50% in the past 24 hours, driven by the launch of its new cross-network bridge and other developments within the APE ecosystem. The governance token jumped from $1.21 to $1.53, reaching a six-month high, while its market capitalization surpassed $1.1 billion.

The recent rally can be attributed primarily to the introduction of ApeChain, a Layer-3 blockchain that enables seamless transfers of ApeCoin, Wrapped Ethereum (WETH), USD Coin (USDC), Tether (USDT), and Dai (DAI) across the ApeChain, Ethereum (ETH), and Arbitrum (ARB) networks. This new functionality enhances the utility of APE within the Yuga Labs ecosystem, known for popular NFT collections like the Bored Ape Yacht Club.

With the new bridge, APE tokens can now be utilized for yield farming, allowing holders to earn returns on APE, ETH, and stablecoins, thereby increasing the token’s value proposition. As the native gas token of ApeChain, APE is crucial for transaction fees, governance voting within the ApeCoin DAO, and payments for Yuga Labs’ games and real-world purchases.

Additionally, ApeCoin has rolled out a smart contract update that incorporates the LayerZero Omnichain Fungible Token (OFT) standard, enabling APE to serve as a governance token for the ApeCoin DAO and facilitate transaction fees across multiple chains.

Market sentiment on X has indicated that the recent surge in APE's price is fueled by a fear of missing out among investors, who are eager to capitalize on potential gains. Historically, when a meme coin crosses the $1 billion market cap, investors anticipate a parabolic price rise, as it becomes less likely to experience manipulation or rug pulls.

At present, both the Relative Strength Index (RSI) and Stochastic RSI for APE are above overbought levels, suggesting a potential correction could be on the horizon. However, sustained interest from traders may continue to push prices higher, as seen with other meme coins like POPCAT and WIF.

Currently, key liquidation levels for APE stand at $1.548, with many intraday traders leveraging positions around this threshold. According to CoinGlass data, if APE reaches $1.548, it could trigger the liquidation of approximately $2.59 million in short positions. As the market evolves, traders will be closely monitoring these dynamics.