Immutable X Skyrockets 50% Overnight: Will IMX Keep Growing?

Key Takeaways

• IMX started an uptrend on September 13.
• Today’s spike was caused by a large volume on Korean Exchanges.
• Derivatives market is extremely negative but may actually lead to a short-squeeze.

The price of IMX has surged by 38% today, marking a remarkable 60% increase from its low of $0.48 on September 13. This surge comes as a surprise after the price was on a downtrend since March 18, plummeting by nearly 70%.

The surge in price can be attributed to significant trading activity on South Korean exchanges BW.com and Upbit. According to Coinmakercap data , the average trading volume was around $10 million before the price increase on September 13, gradually rising to $17.85 million on September 20. Today, the trading volume reached an astonishing $323 million at its peak.

Coingecko data  tells an even more impressive story, including BW.com in its calculations, showing a trading volume of $726 million at its highest point. On September 13, the pre-pump volume was just around $10 million.

“IMX currently holds the 8th position in terms of trading volume. However, as indicated by Coingecko, the trust score is in the red, suggesting the possibility of fake volume. The sudden surge and discrepancies in data between Coingecko and Coinmarketcap further raise suspicions in this regard.

On-chain Activity 

Lookonchain, an on-chain tracking service, has been diligently monitoring IMX on-chain activities. A recent X thread unveiled a noteworthy development: Upbit wallets have substantially augmented their holdings of Immutable (IMX) tokens following a 35% price surge within the past 24 hours.

Concurrently, both individual investors and institutions initiated IMX transfers to various exchanges. A closer examination of the data highlights Upbit’s acquisition of 12.53 million IMX tokens, valued at $9.45 million. Notably, Upbit’s “0x2F77” wallet has now become the 9th largest holder with a total of 20.4 million IMX tokens.

In a related development, the trading entity GSR deposited 2 million IMX tokens, equivalent to $1.52 million, into Binance in response to the 35% price surge. Another significant transfer was made from the wallet “0x74c…441,” which moved 851,322 IMX tokens to Binance, totaling $647,000 in value.

Additionally, during the same period, investors withdrew 3.05 million IMX tokens from the Foundation Treasury Locked wallet. While this activity didn’t trigger the price increase, it occurred after the surge, indicating that investors are likely transferring their tokens to exchanges to take advantage of the price rise.

Derivatives

Using Coinglaass, a data platform primarily focused on derivatives, we can observe an overwhelmingly negative sentiment. The Open Interest (OI)-weighted Funding rate has plummeted to an unprecedented -2,425, a value never witnessed before.

The funding rate reflects payments made to traders holding either long or short positions, determined by the disparity between perpetual contract market prices and spot prices.

Currently, the demand for short positions is exceptionally strong, resulting in a substantial premium for traders with long positions. This one-sided market condition may potentially trigger liquidations and even result in a short squeeze, further driving the price upwards.

We can already see that more short-sellers are liquitading their positions. As Coinglass data  suggest, a total of 735K shorts were liquidated today compared to 694K longs. 

IMX Price Analysis 

IMX price saw a remarkable 307% increase from around $0.38 on November 21 to $1.55 on March 19. Following this surge, a descending triangle pattern formed, likely indicating a corrective downward trend.

The recent retracement dipped below the 0.786 Fibonacci level on September 13, coinciding with the start of the last upswing. Today, as the price attempts to breach the resistance trendline and revisit the previous local high from July 30, it signals the potential beginning of the next upward movement.

Assuming this scenario holds, today’s spike could be the initial sub-wave within a forthcoming five-wave upturn. This wave may lead to another minor high, likely testing the $0.77 level at the 0.5 Fibonacci level, before a smaller correction (wave 2).

We anticipate further highs for IMX only after this wave 2 completes and retests the previously breached resistance as support, ideally leading to a price bounce.

However, if today’s rise fails to establish a sustainable uptrend, it could indicate further downside potential for IMX, possibly targeting levels below $0.38.

In a bullish scenario, the price could aim to recover its March high of $1.55, with the potential for further upward momentum. Conversely, if today’s spike doesn’t sustain an uptrend, it might imply a downward trajectory, possibly reaching levels below $0.38.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.