IMUTABLE X (IMX) Sees slow growth as price fight

Immutable X regained $1.50 for the first time since the May 2022 crypto crash. On-chain calculations show that slowing network growth could slow a potential IMX price rally.

Immutable X (IMX) long-term owners appear to have taken profits since February.

The IMX network is 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 perform fast transactions at almost zero gas fees.

IMX rose to prominence as global interest in NFTs grew in early 2023. However, with the NFT boom now cooling, critical chain metrics show that IMX appears to be struggling to find new demand.

The number of new addresses created on the IMX network has decreased, according to on-chain data from Santiment.

As shown below, network growth peaked along with the price on March 17. Since then, it has decreased from 594 to 84 new addresses created as of March 24.

When network growth slows down persistently, it is a bearish signal that the underlying token may struggle to find new demand. Therefore, the current downward trend in the network could hurt the growth prospects of IMX in the coming weeks.

Moreover, the profit-taking frenzy among long-term IMX owners further confirms the bearish outlook. As illustrated by the red line in the chart below, long-term owners appear to have been selling since early February.

In the Santiment chart below, the IMX Mean Coin Age (90d) has dropped from 60.43 on February 2nd to 28.78 as of March 24th.

The average coin age (90d) calculation calculates the average number of days recently traded tokens held at their previous addresses. A downward trend usually indicates selling pressure among long-term holders of the original token.

Ultimately, if Immutable X does not find new demand and long-term holders continue to sell at current rates, other crypto investors may panic and trigger further IMX price declines.

IMX Price Prediction: $1 is the next stop

According to Global In/Out Of Money (GIOMAP) data compiled by blockchain research firm IntoTheBlock, the IMX price may soon fall below $1.

Immutable X could fall below $1 if it fails to stay above the $1.05 support zone, where 2,550 addresses had bought 664 million IMX coins. Failure to hold this support level could see IMX slide further to $0.83. Here, another 4,000 addresses that bought 588 million coins can ease the decline.

However, the bulls invalidate the decline if IMX breaks above $1.33, which is the maximum price that 2,600 addresses paid for 32 million coins.

If the $1.33 resistance is broken, IMX could go on a prolonged rally towards $1.66, where another 3,400 addresses had bought 14.5 million coins.