Ai16z, a popular Solana meme coin, rebounded on Friday after crashing nearly 50% from its highest level this month.
Ai16z price hit $1.6830, up 32% from its lowest level this week, bringing its market cap to over $1.84 billion.
The token, the third largest meme coin Solana (SOL), rose as on-chain data showed some whales bought the recent dip. Nansen data indicates that a whale purchased tokens worth over $1.58 million on Friday, awaiting a rebound. This trader now holds ai16z tokens worth over $2.8 million.
Two other whales purchased tokens worth over $1 million, while ten others acquired coins worth over $500,000 during the same period. This activity suggests that these traders expect the meme coin to recover once the current selling phase ends.
However, more data shows that smart investors have continued to dump ai16z tokens in recent weeks. The number of smart money holders has fallen to fewer than 80, down from 118 on December 25. Historically, changes in smart money behavior have often been reliable indicators of impending price declines.
Meanwhile, some of the most profitable ai16z traders have started to make profits. The second and third most profitable traders sold almost all of their tokens, making $39 million and $20 million in profits, respectively. The most profitable trader ai16z also sold tokens worth $8.8 million and holds an unrealized profit of $30 million.
Is the ai16z price rebound a dead cat rebound?
The current bounce in ai16z prices could be a dead cat bounce – a situation in which an asset in a downtrend briefly recovers before resuming its decline.
The token retested the critical level at $1.7177 on the four-hour chart. This is an important point, since it was the neckline of the $2.35 double-top pattern. A double top pattern is a well-known bearish indicator, while a breakout and retest formation often signals a continuation of the trend.
Additionally, ai16z price fell below the 50-period moving average. Therefore, unless the token breaks above the 50-period moving average at $1.7490, there is a risk of the downtrend continuing. If this bounce turns out to be a dead cat bounce, the next level to watch will be this week’s low at $1.2663.
