The API3 cryptocurrency has experienced a significant upswing, rising by more than 100% in the previous day. With a $260 million market capitalization, the API3 price is 95% up at $3.05 as of the time of publication. Additionally, the trading volumes have increased to $343 million, a whopping 3500% increase.

Why Did the Price of API3 Soar?

Prominent analyst Sell When Over | 9000.sei (@sell9000) clarifies a few important elements behind the recent spike in API3 prices. The starkly negative funding rate, which is comparable to other UMA experiences, is one important factor. Sell9000 claims that because of the present negative funding rate, which is similar to $UMA, it is expensive to retain long holdings, which incentivizes purchasers to drive up prices.

A $1.5 million market-making loan allegedly issued by DWF has added incentives to drive up prices to lucrative levels, on top of the funding dynamics. Sell9000 draws attention to the fact that this DWF loan includes the ability to buy tokens within a given price range, which introduces another factor into the dynamics of the market.

The Great Mattsby (@matthughes13) emphasizes API3’s breaking through the prior resistance at $2.50 (white circle) and the formation of fresh resistance around $3.20 (yellow circle) from a technical analysis perspective. This trend has enabled the price of API3 to rise by an impressive 45%, as indicated by a noteworthy daily candle.

Even with the encouraging momentum, difficulties could still arise. When asked if $4 will be reached in the near future, Mattsby concedes that it might be challenging to overcome the resistance at $3.20, which is shown by the orange horizontal line. While API3 moves through these crucial stages, the market watches for more updates.

What is API3?

The utilization of application programming interfaces (APIs) has emerged as a potential remedy for smart contracts, which often struggle to obtain trustworthy data.

Unveiled in September 2020, the API3 whitepaper brought attention to a crucial problem with APIs: connection. Because smart contracts do not yet have a direct way to communicate with APIs to obtain the most recent data, oracles have become increasingly popular.

The industry has struggled with the “Blockchain Oracle Problem,” wherein oracles, serving as middlemen between APIs and smart contracts, introduce higher costs and centralization, even though they have somewhat lessened this challenge. By enabling API providers to run their own nodes, API3 aims to solve this problem.

SOURCE:

https://medium.com/@therealcryptojk/api3-a-good-investment-as-price-surges-100-in-a-day-2a88adb703e2