- AI16Z could decline further before rebounding and rallying to $2.6
- Top traders on Binance and OKX traders are now accumulating the token, placing significant buy orders
Over the past week, AI16Z has fallen by 19.05% on the charts. In the last 24 hours alone, it dropped by another 4.59%, with more downside potential based on its chart patterns.
However, according to AMBCrypto’s assessment, top traders on Binance and OKX seem to be diverging from the broader bearish sentiment. This implies that there may be some optimism among experienced market participants, despite the altcoin’s prevailing bearish structure.
Is a drop imminent for AI16Z?
AI16Z has been trading within a month-long ascending channel on the daily chart, characterized by a series of higher highs and higher lows within a defined range of support and resistance.
At the time of writing, the price had retreated from the channel’s resistance level, forming a lower low as the asset begun to decline steadily.
Source: TradingView
Based on this analyst’s chart, it can be predicted that this drop will stop at the 0.618 Fibonacci retracement level. This would be in line with the ascending channel’s base at approximately $0.80 – A level considered a key support zone for the cryptocurrency
From this support zone, AI16Z has the potential to rebound and rally to $2.60, representing significant gains of 325% from the $0.80-level.
Top traders buy against market odds
While press time market conditions pointed to a potential decline, top traders on Binance and OKX traders are opening long positions on AI16Z. This trend was identified through the long-to-short ratio, which measures the number of buyers relative to sellers. A ratio above 1 indicates more buyers, while a value below 1 means that sellers are dominant.
At the time of writing, the long-to-short ratio stood at 3.3497 for Binance top traders and 4.15 for OKX traders. These high figures hinted at strong bullish sentiments among high-level market participants, which could influence a broader market rally.
Spot trading data supported this bullish outlook too. In fact, the supply of AI16Z on cryptocurrency exchanges has been steadily decreasing – A sign of accumulation by long-term holders.
Source: Coinglass
In the last 24 hours, exchange netflows—a metric highlighting the movement of tokens in and out of exchanges—was negative, at -$2.74 million. This meant that $2.74 million worth of AI16Z was moved off exchanges into private wallets, likely for long-term storage.
This negative exchange netflow trend has persisted for five days, with approximately $8.24 million worth of AI16Z withdrawn during this period – A sign of sustained confidence among investors.
Bullish momentum strengthens for AI16Z
The broader derivatives market has been significantly bullish for AI16Z, with both the funding rate and Open Interest on the rise.
The funding rate, a metric indicating whether buyers or sellers are dominating the market, revealed that long traders are currently paying the premium. At 0.0440%—its highest level since 13 January—the funding rate highlighted buyers’ strength in the market.
Source: Coinglass
This bullish trend corresponded with an increase in Open Interest, which measures the total value of unsettled derivative contracts. AI16Z’s Open interest surged by 5.43% to $206.52 million, further pointing to a growing confidence among traders.
When both Open Interest and the funding rate increase, it is a sign of strong optimism among derivative market participants. This optimism can play a major role in driving the overall market higher.
For AI16Z to break into new highs, a shift or divergence in these key metrics might be necessary. Until then, the asset is likely to maintain its current range or potentially trend higher from this level.
