As NFT demand slows, can Immutable X (IMX) turn the tide?

Immutable X (IMX) — a layer 2 scaling solution for NFTs on the Ethereum smart contract network — allows traders and NFT creators to execute transactions quickly with virtually no gas fees. At the beginning of 2023, when NFT is hot again, IMX will be even hotter. Key on-chain metrics show that IMX appears to be struggling to find new demand, even as the NFT boom is currently slowing.

According to Santiment, fewer new addresses were created on the IMX network. On March 17, both network expansion and prices peaked. Since then, the number of new addresses created has decreased from 594 to 84 on March 24.

This steady decline in network growth is a bad sign that the underlying token may be struggling to generate new demand. Therefore, the current weak network momentum may hinder IMX’s growth prospects in the coming weeks.

To make matters worse, long-term holders are frantically taking profits on IMX. LTH appears to have started selling off in early February, with the IMX Average Coin Age (90 Days) Index falling from 60.43 on February 2 to 28.78 on March 24.

The average days of recently traded tokens is calculated using the average coin age (90d) metric. A downtrend usually indicates selling pressure from long-term holders.

Finally, if LTH continues to sell at current levels and Immutable X finds no new demand, other cryptocurrency investors may panic and drive down the price of Immutable X.

Global In/Out (GIOMAP) data collected by blockchain analytics firm IntoTheBlock suggests that the price of IMX could soon dip below $1.

If Immutable X fails to hold the price above the $1.05 support area, where 2,550 addresses bought 664 million IMX coins, it could fall below the key $1 support. If this level is lost, IMX could continue to fall sharply and slide towards $0.83. Another 4,000 addresses bought 588 million tokens at this level, which may have helped stem the decline.

Source: TradingView

However, bulls will invalidate the downtrend if IMX breaks above $1.33, the peak price at which 2,600 addresses bought 32 million tokens. If it breaks the resistance at $1.33, IMX could continue to rise for a while, reaching $1.66, with another 3,400 addresses buying 14.5 million tokens.

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board take

According to CoinMarketCap

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