AI16Z Experiences 13% Surge Amid Whale Purchases, But TVL Declines to $1.48M – What’s Happening?

AI16Z's price increased by over 13% in a day, largely due to significant buying activity from whales in the futures market. However, the total value locked (TVL) in the network has decreased to $1.48 million, indicating a reduction in capital commitment from investors and a pullback in holder confidence.

Key Takeaways

The recent 13% price increase of AI16Z is attributed to whale activity in the futures market, primarily buying at levels between $0.05 and $0.07.
Despite the price surge, there is a notable decline in holders and a loss in confidence as AI16Z remains significantly lower than its peak price of $2.50.
AI16Z's daily trading volume saw a slight increase of 8%, reaching approximately $80 million.

AI16Z jumps 13% but holders pull back: What's next for price?

What’s Behind the Short-Term Price Increase?

The recent spike in AI16Z's value was propelled by significant orders from large traders, known as whales, as revealed by the Futures Average Order Size on CryptoQuant. Whale purchases intensified when the price of AI16Z dipped to around $0.0696. A substantial order placed a day prior at $0.0570 catalyzed the current market recovery. Additional whale activity was noted around the $0.639 mark, which added to the bullish momentum.

AI16Z

Source: CryptoQuant

Moreover, the Futures Taker CVD indicated that bulls have maintained control of the market since the beginning of the month. However, the buying momentum has shown signs of weakness since mid-August, with the market sentiment remaining neutral just a day before the 13% price increase. This raises the question: can this positive sentiment continue to drive prices higher?

AI16Z Price Remains in a Confined Range

From a technical perspective, AI16Z appears to be trading within a range defined by a significant bearish candle formed on October 10th. On the 4-hour price chart, fluctuations between $0.05 and $0.08 have occurred, including a brief rise to $0.10 that was promptly rejected. Despite this ongoing correction, the MACD indicator displayed green bars, suggesting continued buying interest. The recent price surge was sparked by a breakout above a descending trendline resistance established earlier in November.

If AI16Z can maintain support above the Fair Value Gap (FVG) near $0.055, there is potential for the price to climb back towards the monthly high of $0.10.

AI16Z

Source: TradingView

However, AI16Z might also test the support level at $0.050. If it fails to hold this support, it could lead to further adverse conditions for AI16Z, marking a potential downside scenario based on the diminishing confidence of its holders.

Decrease in Holders and Weekly TVL Decline

As of now, the number of AI16Z holders has decreased from 105.42K to 103.98K. This trend indicates a retreat from investors, reflecting a decline in confidence. Given that AI16Z previously peaked at $2.50, the current sentiment suggests dwindling expectations for another rise.

AI16Z

Source: CoinMarketCap

Additionally, the Total Value Locked (TVL) has decreased to a weekly low of $1.48 million from $2.24 million at the start of the month. This downward trend suggests a net outflow of capital from the AI ecosystem, despite recently attempted upgrades such as rebranding and adjusting total supply.

Overall, AI16Z is showing considerable weakness compared to its past performance. For a bullish resurgence in the market, the price must break above the current trading range; failing to do so might lead to additional losses.