On-Chain data shows that the trading volume of Aptos (APT) remains extremely high after the rally, potentially signaling further gains.
The social dominance of Aptos is calming down, but the trading volume remains elevated.
Yesterday, it was announced that tech giant Microsoft has partnered with Aptos Labs to work on blockchain-based AI tools. This major announcement naturally triggered a market reaction, as the company's token, APT, saw a strong increase of 17%.
At the peak of this surge, the token approached the $8 mark but has since experienced a slight decline and has fallen towards the $7.3 mark. The following chart shows how the asset's price has changed recently.
[Insert Aptos (APT) price chart image]Despite the decline, Aptos is still experiencing gains of around 9%. These gains make it by far the best performer among the top 100 assets by market capitalization.
When questioned about the possible reasons for the decline, data from On-Chain analytics company Santiment may provide some clues. As shown in the graph below, Aptos' social dominance saw a significant increase during the rally.
[Insert Aptos (APT) metrics image]Social dominance essentially tells us how many discussions about the top 100 assets in social media are solely derived from conversations about Aptos. When the news broke, discussions in the social media sphere naturally exploded, as a large number of users showed interest in the asset.
While such excitement can fuel a rally, too much of it can actually have the opposite effect. It seems that the FOMO peak in the market contributed to both the peak of the rally and the subsequent price decline.
Since then, social dominance has somewhat calmed down, suggesting that the hype has returned to a healthier level. At the same time, APT's trading volume (the measure of the total number of tokens moved on the blockchain) continues to increase and has reached its highest level since March.
This means that investors have continued to trade with the cryptocurrency even after the rally's decline. In general, high volume is necessary to sustain a significant price movement, as such movements require a large amount of fuel. As the trading volume steadily increases, this could be an initial indication that the Aptos rally is not over yet.
In the graph, Santiment has also included data for another indicator, development activity. This metric tracks the work that developers have done on the project's public GitHub repositories.
From the graph, it is apparent that this metric has been consistently increasing leading up to the announcement, suggesting that developers may have been preparing for the partnership.
Selected image from iStock.com, charts from TradingView.com, Santiment.net
