Immutable X token is stuck in a deep bear market ahead of a big token unlock and as the outlook for non-fungible tokens darkens.
Immutable X (IMX) retreated to $1.958 on Sep. 3, 67% lower than the year-to-date high of $3.74. It was also hovering near its lowest point since November last year.
Immutable X, the popular layer-2 blockchain for gaming and NFTs, will be in the spotlight on Thursday, Sep. 6, as it unlocks more tokens. According to CMC, the network will unlock 32.47 million IMX tokens worth over $41.2 million, leading to more dilution for existing holders.
These new tokens will move to project development, ecosystem development, private sales, and the foundation reserve. Immutable X is then scheduled to unlock over 113.7 million more tokens by December this year.
According to TokenUnlocks, Immutable has unlocked over 1.58 billion tokens and has 416.15 million to go. If all goes well, the vesting schedule will end in November next year.
Token unlocks are seen as negative catalysts for a cryptocurrency because they dilute existing holders, especially stakers. According to its website, staking rewards are generated from the 20% protocol fee and are then distributed to stakers every 14 days. As such, additional tokens in these pools often lead to lower returns.
Immutable X token has also dropped as concerns about the NFT industry continue. Recent data shows that the monthly NFT sales and transactions have continued to fall this year. According to CryptoSlam, total NFT sales in the last 30 days dropped by over 24% to $16.8 million. Buyers and sellers also fell by 41% and 25%, respectively.
On the positive side, there are signs that the network’s gaming ecosystem is doing well. This week, Immutable X partnered with Portal, a leading Web3 distribution platform. This partnership will lead to enhanced distribution of games built on Immutable X and liquidity improvements.
Immutable X price is nearing a key support
The IMX token has slipped from the year-to-date high of $3.7570 to $1.200, the 78.6% Fibonacci Retracement point. It formed a death cross in June and then retested the key resistance point at $1.7185 in August. A break and retest pattern is a popular sign of a continuation.
Therefore, Immutable X token will likely drop and retest the important support at $0.9043, its lowest swing in August. A drop below that point will lead to more downside.
