The value of IMX, the native token of Immutable, the Layer 2 (L2) scaling solution for NFTs on Ethereum, surged 5% during Monday’s intraday trading session. The token’s price peaked at $1.58 before shedding some of its gains to exchange hands at $1.51 at press time.
On-chain data shows a significant uptick in demand for the altcoin by market participants in the past 24 hours. This has pushed its price closer to the upper line of the descending channel, which has formed resistance since March 12.
Immutable Aims to Breach Resistance Level
IMX’s price, as assessed on a one-day chart, has trended within a descending channel since March 12, when it closed at a year-to-date high of $3.60. The altcoin’s price has since declined by 58%.
A descending channel is a bearish signal. When an asset’s price trends within this channel, it consistently moves lower, creating a series of lower highs and lower lows.
The upper line of the channel forms resistance, while the lower line represents support. Since March 12, IMX has faced resistance at $3.75 and has found support at $1.01.
On Monday, the token witnessed an uptick in demand, which has pushed its price towards resistance. According to Santiment’s data, on that day, the number of unique addresses that completed at least one transaction involving IMX totaled 697, marking a weekly high.
Similarly, 265 new addresses were created to trade the altcoin on the same day, the highest number in the past week.
Read More: What is ImmutableX (IMX)?
The surge in an asset’s network activity is a bullish signal. More daily active addresses suggest that more users are interacting with the asset, indicating growing adoption. A rise in new addresses implies that new investors are entering the market, which can drive up demand and potentially increase the asset’s price.
IMX Price Prediction: Liquidity Inflow Confirms the Possibility of a Sustained Rally
Readings from IMX’s price movements on a daily chart confirm the possibility of a break above the resistance level in the near term.
For example, the token’s rising Chaikin Money Flow (CMF) signals a steady inflow of liquidity necessary to drive up its value. Currently, IMX’s CMF stands at 0.11, having crossed above the zero line on July 21 for the first time since May 7.
This indicator measures the flow of money into and out of an asset. When it rises above the zero line, it is a bullish signal. It suggests that buying pressure is high and is often a precursor to a sustained price rally.
If IMX’s CMF continues to rise and the current buying pressure is maintained, IMX’s price will rally to $1.77.
However, if profit-taking activity ensues at this level, the token’s price might trend downward to the support level, invalidating the bullish thesis above.
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