AI16Z Sees Highest Recorded Outflows But Demand Could Come Back

AI16Z is arguably on top of the list of relatively new coins that have grabbed institutional attention.

It is thus one of the cryptocurrencies that were have been monitoring and something interesting just occurred.

AI16Z just experienced its highest recorded surge in spot netflows. Outflows peaked at $5.27 million at the time of writing.

Granted, the spot flow data was only available since 7 January, hence not a lot of data to work.

In other words, netflows may have been higher especially last year when the cryptocurrency was rallying in the last 2 months of 2024.

Nevertheless, the latest data demonstrated a surge in sell pressure at a noteworthy level.

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Is AI16Z Ready for a Bullish Recovery?

AI16Z achieved its current ATH on 2 January at $2.509 but has declined considerably since then. So much that it just entered a critical zone where the probability of bouncing back is significantly high.

The cryptocurrency experienced its first major rally shortly after its late October 2024 launch. This means it is currently in its first major pullback since then.

Mapping Fibonacci retracement from its lowest price point to recent ATH price reveals a retest of its 0.5 to 0.618 Fibonacci range.

The latter suggests that the price could find a demand resurgence between the $0.96 and $1.26.

Price retested the range after the surge in sell pressure in the last 24 hours at the time of observation. It was already well within the same range at its $1.172 press time price.

The recent dip also marked the first time that price dipped below its 50% RSI level since November last year.

While this may indicate fair value for re-accumulation, extended sell pressure beyond this point may lead to loss of confidence and potentially more downside.

AI16Z Derivatives React After Fibonacci Range Retest

There was a 13.46% dip in volume in the last 24 hours at the time of observation. This may indicate cooling off from the latest downside momentum.

It was accompanied by a 20.72% gain in open interest which could be on the bullish side.

According to Coinglass, there was a significant uptick in the AI16Z weighted funding rates. This was confirmation that the surge in open interest in the last 2 days was in favor of bullish expectations.

This observation underscores yet another sign indicating that pivot could potentially occur in the Fibonacci retracement zone.

But what would happen if AI16z was to rally from the current level?

A recovery to its current ATH would be equivalent to a 110% gain. And based on the robust demand that prevailed in the first bullish wave, it is safe to say that such a recovery is quite likely.

On the other hand, the fact that price just entered the Fibonacci zone does not necessarily guarantee immunity from more downside.

Price could just as easily break below this zone, undoing more of its November and December gains.

The next major price move will depend on the level of interest. As noted earlier, the AI16Z coin attracted a lot of institutional demand initially.

If this trend continues, then we could see price achieve a strong rebound from current level.