Solana meme coin ai16z price dips as profit leaders sell

Ai16z, the viral Solana meme coin focused on artificial intelligence, suffered a sharp reversal and moved into a local bear market.

This decline is mostly due to profit taking as the token is up 20,500% from its November lows. Its market value reached $2.3 billion earlier this week.

Ai16z (AI16z) fell over 21% to $2 on Saturday, January 4, from this month’s high of $2.50.

Nansen data shows the number of smart money holders fell from 118 in November to just 80 on Saturday. Their total assets fell from over 700 million tokens to less than 500 million.

Based on their strong historical performance, smart money investors are generally more sophisticated than retail investors. These investors are known to buy crypto and stocks early and exit before they hit the discount phase.

Smart money investors are selling | Source: Nansen

Another proof of this distribution is that the number of ai16z tokens on exchanges has increased in the last few days. They rose from 12.32 million last week to over 43.65 million on Saturday. Most of these tokens are available on exchanges such as Gate, Raydium, MEXC and Orca.

Meanwhile, there are signs that many of the most profitable ai16z traders are starting to take profits. The most profitable investor made a profit of $148 million and made sales of $4.6 million. It currently holds 96% of the investment.

The next three most profitable investors earned $63 million, $57 million, and $44 million, respectively. These investors retained their positions. But most other profit leaders sold most of their tokens.

ai16z profit leaders | Source: Nansen Ai16z price crash ai16z price chart | Source: crypto.news

Apart from taking profits, the ongoing decline in ai16z prices is also likely due to the Wyckoff Method. This popular theory explains how assets rise and fall in four stages: accumulation, price appreciation, distribution, and discount.

The chart above shows that the token remained in the accumulation phase at the beginning of November and then started to rise in December. This increase comes as crypto investors embrace the fear of missing out.

Therefore, it has now moved into the distribution phase, followed by a discount phase characterized by selling rather than purchasing (as seen in the graphs above). Therefore, there is a risk that the token will drop 50% from the current level to $1.