The price of API3 has seen a significant 91% surge today, with the current price reaching $3.0. According to Sell When Over | 9000.sei (@sell9000), there are several factors contributing to this price pump.
Extreme Negative Funding Rate
One major reason cited is an extreme negative funding rate for API3, similar to what was seen previously with UMA. As Sell9000 explains, “Extreme negative funding rate atm, just like $UMA.” This makes holding long positions expensive and incentivizes buyers to push the price up.
Market Maker Incentives
Additionally, DWF has issued a $1.5 million market making loan to incentivize pumping the price up to profitable levels. As Sell9000 states, “DWF issued a $1.5M market making loan w/option to buy the tokens between $2.75 & $4.25 at end of term Which means they need to pump this to be profitable.”
Overcoming Technical Resistance
From a technical analysis perspective, the Great Mattsby (@matthughes13) notes API3 broke through previous resistance around $2.50 (white circle) and hit new resistance around $3.20 (yellow circle). This has allowed the price to surge 45% already in a giant daily candle.
However, when asked if $4 is achievable in the next few hours, Mattsby suggests there will be difficulty overcoming resistance at the $3.20 level marked by the orange horizontal line.
So in summary, while the pumping price of API3 has already seen impressive gains due to negative funding rates and market maker incentives, technical factors may make rallying further to $4 a challenge in the short term. Yet the remarkable 91% daily surge shows there is substantial momentum propelling this asset upwards.
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