Immutable X reclaims $1.50 for the first time since the May 2022 crypto crash. On-chain metrics show that decreasing network growth could slow down a potential IMX price rally.
Immutable X (IMX) long holders have been taking profits since February.
IMX network not growing
Immutable X (IMX) is a layer-two scaling solution for NFTs on the Ethereum smart contract network. It allows NFT traders and creators to make fast transactions at almost zero gas fees.
IMX rises to prominence as early 2023 sees global interest in NFTs. However, with the NFT boom cooling off, key on-chain metrics show that IMX is struggling to find new demand.
According to on-chain data from Sentiment, the number of new addresses created on the IMX network is declining.
As seen below, the growth of the network peaked along with the price on March 17th. Since then, it has dropped to 84 new addresses out of 594 created as of March 24.
When there is a sustained decline in network growth, it is a bearish sign that the underlying coin may struggle to find new demand. Therefore, the current network traction downtrend could hurt IMX’s growth prospects in the coming weeks.
Moreover, profit-taking frenzy among IMX long-term holders further validates the bearish outlook. As shown by the red line in the chart below, it looks like long holders have been selling since early February.
In the sentiment chart below, the IMX Mean Coin Edge (90d) has fallen from 60.43 on 2 February to 28.78 on 24 March.
The Mean Coin Age (90d) metric calculates the average number of recently traded tokens that remained at their previous addresses. A downtrend usually indicates selling pressure among long-term holders of native tokens.
Ultimately, if the immutable X fails to find new demand and long-term holders continue selling at the current rate, other crypto investors may panic and drive the IMX price further down.
IMX Price Prediction: $1 Is The Next Stop
According to Global In/Out of the Money (GIOMAP) data compiled by blockchain forensics firm IntoTheBlock, the price of IMX may soon fall below $1.
Immutable X could drop below $1 if it fails to stay above the $1.05 support area, where 2,550 addresses bought 664m IMX coins. Failure to hold this support could lead IMX further down to $0.83. Here, another 4,000 addresses that bought 588 million coins could mitigate the slump.
Nevertheless, the bulls invalidate the downswing if IMX breaks above $1.33, which is the maximum price that 2600 addresses paid for 32 million coins.
If the $1.33 resistance is broken, IMX could head for a longer rally towards $1.66, where another 3,400 addresses bought 14.5 million coins.
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