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Market trends suggest investors are taking a bearish view of Aptos.
The open interest (OI) volume for APT futures, representing outstanding futures orders in the market, surged to a three-month high above $160 million this morning, per Coinglass data.
This increase in APT price and OI volumes follow a new AI partnership with Microsoft on Thursday.
Aptos, a layer-1 blockchain platform, emerged as a spin-off from Facebook's–now Meta–crypto project, Libra, which launched on October 12, 2022.
Through the partnership, Aptos plans to leverage Microsoft Azure to introduce new AI-powered blockchain tools, starting with an Aptos Assistant chatbot.
The AI chatbot will assist users and developers with queries about the blockchain.
The APT price spiked by 17.5% to reach a peak of $7.92 minutes after the announcement.
Aptos token an ‘obvious short’
Many traders are already discounting the token’s bullish move, as evidenced by the number of traders shorting APT.
Crypto users have criticized the term “partnership,” saying that Aptos is only paying to use a Microsoft service.
why no mention of this great partnership from Microsoft? Seems a bit one-sided
— marky (@trader_marky) August 9, 2023
Other traders have called it an “obvious short” due to weak fundamentals and heavy dilution.
Futures positioning data currently shows a strong short inclination as the funding rate for perpetual swaps plummets.
Perpetual swaps are a type of futures contract with no expiration date. A funding rate is a mechanism that shows the relative demand for short and long orders for specific assets.
The funding rate is positive when demand for longs increases, and negative when the demand for shorts increases.
Currently, a negative spike in the APT funding rate accompanied by an OI volume spike suggests that traders are betting against the recent price surge.
However, heavily-shorted tokens have become easy targets for a short squeeze in the past.
A short squeeze happens when an asset experiences a rapid and significant price increase as short players are forced to cover their positions by buying.
APT unlock influence
The current short positioning among traders also appears to be influenced by an upcoming token unlock.
According to Aptos’s token emission schedule, 4.54 million APT tokens worth $33.5 million will be unlocked on August 12. The represents 2% of the APT circulating supply.
4.54 million $APT will be unlocked on August 12, worth over $ 35 million 2% of circulating supply. https://t.co/aoKYtIdrZ6
— Eugene Ng 🌊 (I’m Hiring) (@Eug_Ng) August 9, 2023
These tokens are not released into the market immediately despite their unlocks, which reduces dilution risks.
Notably, the tokens are not allocated toward investors or core contributors but are going toward the community and the Aptos Foundation.
Aptos did not immediately respond to Decrypt’s request for comment.
The unlock of investor and core contributor allocations, which are vulnerable to sell-off pressure, will begin in November.
On-chain analytics platform Santiment also v that the token “may foreshadow another higher high” based on the spike in trading volume and positive development activity.
📈🧑💻 #Aptos has decoupled after its partnership with #Microsoft was announced to build A.I. tools for #blockchain integrations. The crowd showed major #FOMO, but has calmed down. However, rising volume & dev. activity may foreshadow another higher high. https://t.co/vFgMZQo7Io pic.twitter.com/Ub2MGu0QFC
— Santiment (@santimentfeed) August 10, 2023
APT was last trading at $7.30, 8.2% higher than yesterday.