Incredible Aptos price jump of +565%. What’s going on?

Here, we consider different versions of the abnormally high growth of the Aptos token price by +565% in recent weeks. According to LightCrypto traders’ version, we are probably dealing with market manipulation, it is also alleged that Aptos developers are selling their tokens massively at current price peaks.

 

One version of what’s going on

Crypto market participants are discussing the unexplained growth of the Aptos blockchain project token, which grew by +565% in the last two weeks. There is no fundamental news or reason for such rapid growth. In an attempt to explain it, analysts give various reasons, based on which different predictions are made. Examples include positive predictions, a neutral alternative, and a negative scenario that explains this rally with the pump & dump scheme that is widely used in the crypto market. 

Out of many versions and variants, the most interesting explanation seems to have been given by the LightCrypto traders’ group (121k followers on Twitter), which specializes in finding trading insider information.

According to the version of the LightCrypto trading team, the developers of the Aptos project are going to arrange a token sale for South Korean users. This analytic is based on the standard on-chain monitoring, according to which there are large withdrawals from Aptos developers’ wallets to several crypto exchanges, in particular — Upbit.

They write:

Aptos dev team wallet has started feeding the Korean ducks, ~$20mm in spot sent to Binance in the last hour. $1b in inventory remains in the wallet.

The screenshot that LightCrypto attached as a proof shows these transfers in the Aptos blockchain:

The appetite of Koreans on Upbit exchange, according to cluster analysis, averaged from $10M per day at the peak and has now gradually decreased to $5M. This indicates that the crowd of eager newcomers looking to get rich quick has already purchased this token and gradually loses the ability to maintain the previous level of demand.

LightCrypto provides screenshots confirming both the initial increase in demand and the gradual drop in the volume of APT token trading on Upbit:

In confirmation of this hypothesis, you can see on the price chart the beginning of the correction of the price, which at its peak was held in the range of $19-18 for more than a week, but has now gone to the level of $17. You can clearly see that the casual buyer is gradually losing the ability to buy tokens at the maximum price, and the market is slowly starting to cool down.

In the next 2-3 days, it will become definitively clear whether this is the end of the current growth cycle.

Aptos dev team wallet has started feeding the Korean ducks, ~$20mm in spot sent to Binance in the last hour.

$1b in inventory remains in the wallet.

The tightly controlled supply has activated. pic.twitter.com/Ll75mTX0TQ

— light (@lightcrypto) January 28, 2023

Why is this suspicious?

Open statistics say that the top 20 wallets on this blockchain contain 97% of the circulating Aptos coins. The largest APT holder is the Aptos Foundation. They have almost 1 billion tokens (meaning they own more than one-third of the tokens).

The presence of such ultra-large players in any unregulated market is a potential opportunity for price manipulation. If such whales conspire, it is very easy to dump and pump the price. The mechanism in the simplest case is the following: you buy from yourself and sell to yourself for the necessary price, creating the illusion of demand and trading volumes. In regulated markets, such as the stock market, such schemes are a financial crime. But the crypto market is an unregulated area, so anything is theoretically possible here. This is an argument for being more cautious and better aware of what is going on.

https://twitter.com/china_guhetu/status/1618313437163184128

This is why the sudden and baseless rise of 565% is highly suspicious and has attracted the attention of a wide variety of blockchain researchers. They, like LightCrypto, use the open nature of blockchain to find explanations for what is happening.

https://twitter.com/noblemillions/status/1617952747588038656