Ai16z Sees Sharp Decline as Smart Money Investors Take Profits

The Solana meme coin, Ai16z, has experienced a significant reversal, entering a local bear market. This downturn is primarily attributed to profit-taking, as the token had skyrocketed by over 20,500% from its lowest level in November, with its market capitalization peaking at $2.3 billion earlier this week.

Ai16z dropped to a low of $2 on Saturday, January 4, down by over 21% from this month’s high of $2.50. According to Nansen data, the number of smart money holders has decreased from 118 in November to just 80 on Saturday, with their combined holdings falling from over 700 million tokens to below 500 million.

Smart Money Investors Sell Off

Smart money investors, known for their sophisticated investment strategies and strong historical performance, are selling their Ai16z holdings. These investors typically buy early and exit before the markdown phase, indicating a potential shift in market sentiment.

Another sign of this distribution is the surge in Ai16z tokens on exchanges, increasing from 12.32 million last week to over 43.65 million on Saturday. Most of these tokens are held on exchanges like Gate, Raydium, MEXC, and Orca.

Profit-Taking and the Wyckoff Method

In addition to smart money investors taking profits, the ongoing Ai16z price retreat can be attributed to the Wyckoff Method. This popular theory explains how assets rise and fall in four stages: accumulation, markup, distribution, and markdown.

The Ai16z price chart suggests that the token remained in an accumulation phase in early November, entered markup in December, and has now moved into the distribution phase, followed by a markdown phase, characterized by more selling than buying. As a result, there is a risk that the token will fall to $1, down by 50% from the current level.

The most profitable Ai16z investor has made a profit of $148 million and has sold $4.6 million, still holding 96% of the investment. The next three most profitable investors have maintained their positions, but most other profit leaders have sold many of their tokens.

As the Ai16z price continues to fluctuate, investors should remain cautious and stay informed about market developments. For more updates on cryptocurrencies and market trends, visit Global Crypto News.