Can IMX bulls hold on after selling pressure fuels daily losses of 12%?

As the market crashed on the back of Binance being hacked, most altcoins were left bleeding. Immutable was one of the most affected altcoins on the charts. In fact, IMX recorded a massive price drop on the charts. The altcoin not only lost the $0.12-support but also breached $0.11, dropping to a low of $0.106. 

Soon after, it slightly rebounded though. At the time of writing, Immutable was trading at around $0.11, down 12% on the daily charts.

At the same time, the altcoin’s volume jumped by 218%, hinting at strong selling pressure as traders reduced their exposure. The daily turnover further confirmed the selling pressure, with the same climbing to a three-week high of $5.06 million.

IMX plunges as sentiment flips risk-off

According to AMBCrypto, IMX’s fall was driven largely by weakness in the derivatives market. According to Coinalyze, Perpetual Sell Volume on Binance surged to 41 million, compared to 39 million in Buy Volume.

Perps bet buying fell deeper into the negative zone, falling to -6 million. This suggested that more positions were closed than open.

The same can be seen when examining the Futures flows. In fact, CoinGlass data revealed that Immutable’s Open Interest fell by 8.4%, dropping to $16.7 million.

This metric has not been this low since September. The drop was backed by higher volume as derivatives volume rose by 268% to $37 million.

A hike in volume and falling OI usually imply greater market activity as traders close positions to reduce risk exposure. Historically, risk-averse sentiment towards derivatives has led to short-term market shocks that often preceded price drops.

Spot market takes a different path

While derivatives traders panicked and risk sentiment flipped, spot investors increased their withdrawals. On 30th October, Immutable’s Spot Netflow dropped to -$0.4 million.

The rising withdrawals, especially following the Binance hack, suggested that most investors moved tokens off exchanges to either cold storage, private wallets, or other safer protocols.

However, this could mostly be interpreted as bullish for the altcoin as such withdrawals also reduced immediate selling pressure.

Lower supply helps in boosting scarcity and could help IMX recover from the recent slip on the price charts. 

Can IMX avoid slipping further?

With the market in panic mode, Immutable seemed to be under strong bearish pressure. A look at its momentum indicators seemed to confirm this view too.

For example, IMX’s Relative Strength Index (RSI) dropped to 26 into oversold territory. At the same time, the Relative Vigor Index (RVGI) formed a bearish crossover, falling deeper into the negative zone, further confirming the trend strength.

Taken together, these two indicators suggested that the momentum behind the downtrend is strong and that the trend is likely to continue. Therefore, if the sentiment persists after the Binance hack, IMX will revisit $0.10.

However, if the exchange outflows seen over the past day persist, they could help absorb some of the pressure. In doing so, the altcoin will close daily at $0.12, clearing the path for recovery.

Final summary

• Immutable [IMX] fell by 12%, breached $0.12, falling to a low of $0.106 before rebounding slightly.
• IMX’s fall was driven by intense selling pressure as derivatives sentiment turned risk off.