The API3 price rally has triggered renewed interest among investors who are eyeing the $4.0 target in the near term. By Bhushan Akolkar 21 mins ago
The API3 cryptocurrency has witnessed a strong rally gaining over 100% in the last 24 hours. As of press time, the API3 price is trading 95% up at $3.05 with a market cap of $260 million. Also, the trading volumes have skyrocketed by a staggering 3500% to $343 million.
What’s Behind the API3 Price Jump?
Renowned analyst Sell When Over | 9000.sei (@sell9000) sheds light on several key factors driving the recent price surge in API3. One significant contributor is the extremely negative funding rate, drawing parallels to previous instances seen with UMA. According to Sell9000, the current negative funding rate, akin to $UMA, makes holding long positions costly, creating an incentive for buyers to propel the price upward.
In addition to the funding dynamics, DWF has reportedly provided a $1.5 million market making loan, introducing further incentives to boost the price to profitable levels. Sell9000 points out that this loan from DWF comes with an option to purchase tokens within a specified price range, adding an additional element to the market dynamics.
From a technical analysis standpoint, the Great Mattsby (@matthughes13) highlights API3’s breakthrough of the previous resistance at $2.50 (white circle) and the establishment of new resistance around $3.20 (yellow circle). This development has facilitated a remarkable 45% surge in API3 price, marked by a significant daily candle.
#API3 with a giant 45% daily candle so far breaking above previous resistance (white circle) and finding new resistance at the blue angle above (yellow circle). Great to see pic.twitter.com/bGMNEYXbLR
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— The Great Mattsby (@matthughes13) January 20, 2024
Despite the positive momentum, challenges may lie ahead. When questioned about the possibility of reaching $4 in the short term, Mattsby acknowledges the potential difficulty in surpassing the resistance at $3.20, identified by the orange horizontal line. The market awaits further developments as API3 navigates these critical levels.
About API3
Smart contracts frequently face challenges in accessing reliable data, and the use of application programming interfaces (APIs) has emerged as a potential solution to address this issue.
API3 aims to revolutionize the creation, management, and monetization of decentralized versions of APIs on a large scale. As blockchain technology continues to gain prominence in various sectors, ranging from decentralized finance to supply chain management, the API3 team emphasizes the increasing importance of smart contracts delivering “timely, reliable real-world data.”
The whitepaper for API3, unveiled in September 2020, highlighted a critical issue associated with APIs: connectivity. Currently, smart contracts lack a direct means to connect with APIs for the most up-to-date data, leading to the surge in popularity of oracles.
While oracles have mitigated this challenge to some extent, the industry has grappled with the “Blockchain Oracle Problem.” Oracles, acting as middleware between APIs and smart contracts, introduce increased costs and centralization. API3 seeks to overcome this predicament by empowering API providers to operate their own nodes.
