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Aptos showed the biggest return on the cryptocurrency market after spiking by more than 32% in the last 24 hours despite facing some serious problems right after being listed on Binance. Luckily, there are a few serious reasons why APT may still succeed on the market.
Negative funding rates
Funding rates may sometimes act as a starter for a reversal as opening more short positions becomes more expensive, and bulls receive support from market makers. Technically, after funding rates become negative, they are paying to bulls.
According to Coinglass data, Aptos token APT perpetual contract funding rate is negative, Binance -0.6683%, OKX -0.2797%, Bybit -0.7500%, FTX -0.3976%, or because the recent Aptos ecosystem has attracted a large number of participants for hedging. pic.twitter.com/9K9Q5vZgJd
— Wu Blockchain (@WuBlockchain) October 23, 2022
The main reason behind funding rates turning negative was the active hedging after the team behind Aptos showed a lack of understanding of some blockchain mechanisms like the Sybil attack. After the release of a sudden airdrop, APT faced a massive spike in selling pressure, causing a plunge from $15 to $7.
VC's support
It is not a secret that prior to the listing on large exchanges, Aptos already received a massive amount of support from institutional investors. The main reason being the tie of the project to Meta's DIEM crypto project that became obsolete after facing a regulatory crackdown.
Unfortunately, some investors are worried that the large percentage of institutional investors will lead to an immediate spike in selling pressure as soon as APT starts recovering.
Market's recovery
Despite the 50% plunge, Aptos remains one of the biggest digital assets on the market, and a potential recovery of the market would certainly bring some support for the token. Unless institutional investors start selling the token as soon as possible, APT's recovery rally is not something investors have no right to expect.
At press time, Aptos is trading at $10 and showing a 32% price increase in the last 24 hours.
Alex Dovbnya
