APE surges 50% as investors react to ApeChain launch, major liquidation looms ahead

ApeCoin has experienced a 50% price surge over the past 24 hours, reaching a six-month high of $1.53, as its market cap surpassed the $1.1 billion mark. This rally is largely driven by the launch of ApeChain, a new Layer-3 blockchain, and the introduction of a cross-network bridge that enhances the coin’s utility within the Yuga Labs ecosystem.

The newly launched cross-chain bridge enables seamless transfers of APE, Wrapped Ethereum (WETH), USD Coin (USDC), Tether (USDT), and Dai (DAI) across the ApeChain, Ethereum (ETH), and Arbitrum (ARB) networks. With this new bridge, ApeCoin can now be used for yield farming, allowing holders to automatically generate returns on APE, ETH, and stablecoins. This expands APE’s utility within the ecosystem, where it can also be used for transaction fees, voting within the ApeCoin DAO, and as a payment method in Yuga Labs’ NFT titles and for real-world purchases.

As the native gas token of ApeChain, APE plays a critical role in paying transaction fees across the network, facilitating governance within the ApeCoin DAO, and serving as a payment method in various digital and physical contexts.

In addition, ApeCoin recently introduced a smart contract update, incorporating the LayerZero Omnichain Fungible Token (OFT) standard, which allows APE to be used across multiple chains and enhances its functionality for cross-chain transactions and governance.

The surge in APE’s price has been attributed to a fear of missing out (FOMO) from investors, who have been flocking to the token amid its recent developments. Analysts have noted that once a meme coin crosses the $1 billion market cap threshold, it tends to experience parabolic price action, as investors increasingly believe in its stability and long-term growth potential, making it less likely to be manipulated or subject to a rug pull.

At the time of writing, both the Relative Strength Index (RSI) and the Stochastic RSI for APE were in the overbought territory, typically indicating a potential price correction. However, for meme coins, continued interest and trading activity can drive prices even higher, as seen with other ApeCoin competitors like POPCAT and WIF in the past.

At present, the crucial liquidation level for APE on the upside is $1.548, with many intraday traders using leverage around this price, according to data from CoinGlass. Should APE reach $1.548, it could trigger the liquidation of approximately $2.59 million worth of short positions.