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Immutable X and ApeCoin Prepare for Token Unlocks — IMX Price Expected to Outperform APE

Published May 17, 2024 9:09 AM
Valdrin Tahiri
Published May 17, 2024 9:09 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • Immutable X (IMX) and ApeCoin (APE) both face token unlocks on May 17.
  • IMX broke out from a resistance trend line and trades in a bullish pattern.
  • APE broke out from its resistance but failed to sustain the upward movement.

While the IMX price has increased significantly since the start of 2023, the exact opposite has happened with ApeCoin, which is mired in a lengthy downtrend. This difference in strength is especially notable, because APE is very close to its all-time low.

Both cryptocurrencies face token unlocks today (May 17 2024), which could affect their price. However, each might react differently. Which token is better equipped to handle this dilution and maintain its value?

How Big Are the Unlocks?

On May 17 2024, IMX will unlock 25.53 million tokens , which is 1.75% of the circulating supply, worth just over $50 million. ApeCoin will unlock 15 million tokens , which is 2.48% of the circulating supply, worth nearly $19 million.

May was a big month for token unlocks, with AEVO leading the way with an increase of 750% relative to its circulating supply.

The amount of the unlock relative to the circulating supply seems to have an effect on the price. SUI and DYDX both had token unlocks of over 10% and fell after the unlock. On the other hand, AVAX did not react to its 2.5% token unlock, and neither did APT. On the other hand, ARB increased in the past two days despite a token unlock of 3.5% of its circulating supply.

Since the unlocks for both IMX and APE are less than 2.5% of the circulating supply, the prevailing thought is that the unlock will not have an effect on the price. In any case, the price movements of both will be analyzed to determine if the unlock is likely to cause more sell pressure or not.

IMX Breaks Out – Creates Bullish Candlestick

The IMX price has increased since falling to a low of $1.67 on April 13. On May 12, it broke out from a descending resistance trend line existing since the yearly high of March 12. This is a sign that the correction is over.

The price action aligns with this possibility, since IMX created a bullish engulfing candlestick (green icon) on May 15. The candlestick took the price to the horizontal and Fibonacci resistance of $2.45. Combined with a shorter-term ascending support trend line (dashed), this created an ascending triangle, a bullish pattern.

The RSI and MACD are both trending upward. Moreover, the RSI just increased above 50 and the MACD moved into positive territory (green circle), both indicative of a bullish trend.

IMX Price Breakout
IMX/USDT Daily Chart | Credit: TradingView

Breaking out from the $2.45 area will confirm the bullish trend. Then, IMX can move to the 0.618 Fibonacci retracement resistance at $2.97. Despite this bullish outlook, a rejection from the area can trigger a drop to the ascending support trend line at $2.05.

APE Price Breaks out but Fails to Sustain Increase

The daily time frame APE price chart is similar to IMX in two ways: APE has increased since April 13, and the price broke out from a resistance trend line existing since the yearly high.

However, the movement since the breakout has differed. While IMX created a bullish pattern, APE fell and returned to its pre-breakout support at $1.15. Even though APE also created a bullish engulfing candlestick on May 15, it has lost most of its gains since.

The daily RSI and MACD are in the process of generating bullish divergences (green lines). However, these divergences are conditional on the price bouncing above support.

Apecoin Price All-Time Low
APE/USDT Daily Chart | Credit: TradingView

Therefore, whether APE bounces at $1.15 or breaks down will likely determine the future trend’s direction. A bounce can trigger an upward trend toward the 0.382 Fibonacci resistance at $1.65. On the other hand, a breakdown can cause a drop to the all-time low support at $1.

Unlocks Likely to be Irrelevant, IMX Price Action More Bullish Than APE

While the IMX and APE token unlocks are not significant enough to make a notable effect on the price of either asset, the IMX price action is more bullish than the APE one. This is because of its bullish pattern and strength shown after the breakout. The APE trend depends on whether the price bounces at $1.15 or breaks down. The fact that APE trades close to its all-time low also makes the trend more bearish.

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