Assets covered: APY Finance (APY)

Metrics used: Social volume, trading volume, transaction volume, active addresses, network profit/loss, MVRV, mean coin age and mean dollar age

APY Finance is a yield farming project with a solid set of investors onboard:

APY started trading on Balancer’s LBP (Liquidity Bootstrapping Pool) in November, multiplied x10 to February ATH and now sitting around 75% below:

And looks like APY is now showing a nice set of green flags. Let me show.

Volumes play a significant role in figuring out token's positioning. Social one from behaviour point of view, trading one as a classic metric, transaction volume as onchain analogue of trading volume, and active addresses as one of onchain fundamentals. So let's start with them.

1. Social volume

Seems that APY Finance is being mentioned on crypto social media more and more, indicating a steadily increasing social interest. It's quite a positive sign for the price. It can be a fuel for the price.

2. Trading volume

Trading volume is slowly picking up after correction. It's also a good sign.

3. Transaction volume

Amount of APY tokens being moved onchain is on the move. We can see a spike exactly at a local bottom few days ago. I could indicate an increased onchain activity without actual selling tokens.

4. Active addresses

Amount of active APY addresses is basically mirroring the trading volume chart. It's picking up more and more after the drop. A nice healthy growth. You could also notice that APY ATH is built on double active addresses top, which is quite common for spotting the top - price higher high on active addresses lower high (divergence) is a well known red flag and sort of an increased risk alert.

5. Network Profit Loss

Here’s how NPL works: for each unit of a certain coin that moves on the blockchain, we take the price at which it last moved and assume this to be its acquisition price. Once it changes addresses again, we assume this to be its sell price. Because of this, spikes in an asset’s NPL suggest that the coins currently moving on the blockchain are - on average - being moved (or ‘sold’) at significant profit, and vice versa.

APY’s NPL has shown quite some spikes downwards lately, signalling that the coins moving on the blockchain are - on average - doing so at a loss. Simply speaking, holders selling at a loss. A kind of pain for APY holders. Which is good for possible price recovery.

6. MVRV

Speaking of buy-in opportunities, APY’s MVRV ratio has also been moving into the proverbial ‘opportunity zone’ with its latest correction. To those unfamiliar, MVRV is an on-chain indicator that tracks the average profit or loss of a certain group of holders. For instance, APY’s 30-day MVRV tracks the average P or L of all addresses that have acquired APY in the previous 30 days.

As a rule of thumb, the lower the MVRV ratio, the more likely it is that potential holders could begin to form their new positions - and vice versa. This is why some on-chain analysts believe that low MVRV ratios suggest ‘undervalued’ conditions while extremely high MVRVs might present a dangerous time to buy.

APY's MVRV is at all time low levels around -45%, significantly undervalued and deep in 'opportunity zone'.

7. Mean Coin Age & Mean Dollar Invested Age

These are two wide time range metrics applied to a relatively young APY token. Simply speaking, a rising slope indicates accumulation period (ranging or bottoming), a declining slope stands for redistribution (around tops). APY charts showing token is in accumulation mode and not in toppish redistribution obviously.

Summing up

Despite we've seen similar flags around other token's bottoms, it's necessary to keep in mind that this case may be different. Looking good but who knows. Take care.

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.