The rapid increase in the value of Immutable’s IMX token has attracted not only the interest of crypto fans but also remarks from industry experts.
In a surprising turn of events, ImmutableX (IMX) is experiencing a remarkable surge of 38.1% in just a few hours this morning following a corresponding trading volume spike. Recent data from CoinGecko revealed that IMX went from a modest $0.55 to an impressive peak of $0.76.
The Driving Force Behind the ImmutableX Volume Surge
The rapid increase in IMX’s price can largely be attributed to substantial trading volume spikes on two prominent South Korean exchanges, BW.com and Upbit. These exchanges facilitated an astonishing $453.6 million in IMX trading within the last 24 hours.
This surge in trading activity propelled IMX’s total daily trading volume to an impressive $664 million, a figure that is more than six times higher than its 30-day average trading volume, which typically hovered around $109 million.
This surge in trading volume has sent shockwaves through the crypto market, as IMX’s 24-hour trading volumes now surpass those of many top 10 tokens by market capitalization. Notable tokens like Binance Coin (BNB), Litecoin, and Solana have all been surpassed by IMX’s trading activity in the past 24 hours.
This surge in popularity has drawn attention not only to ImmutableX’s platform but also to the emerging Non-Fungible Token (NFT) sector as a whole.
Implication of IMX’s Recent Surge
The rapid increase in the value of ImmutableX’s IMX token has attracted not only the interest of crypto fans but also remarks from industry experts. Benjamin, the co-founder of the crypto analytics firm Jarvis Labs, has offered insights into the dynamics behind this price rally and has raised some noteworthy points of caution.
Benjamin points out that this surge in trading volume on Korean exchanges has had a ripple effect on other exchanges, leading to increased spot and derivatives trading activity on platforms like Binance, Bitget, and OKX.
However, Benjamin also cautions that IMX’s price may experience a significant downside once the rise on the Korean exchanges subsides. Such price corrections are not unusual in the crypto space, where rapid surges are often followed by pullbacks as market dynamics normalize.
Another factor that Benjamin highlights is the rising open interest volumes for IMX derivatives. While this may indicate growing interest in trading IMX, it also introduces potential risks for short-term traders. Notably, high open interest can contribute to increased market volatility and potentially lead to liquidations if the price moves unfavorably for leveraged traders.
Data from CoinGlass indicates that traders are aggressively entering short positions for IMX derivatives. This is evident from the spike in negative funding rates on perpetual swaps. The funding rate represents the interest paid by perpetual swap contract holders based on the relative demand for long positions versus short positions.
As of now, the funding rate for IMX contracts is at -0.25% for an eight-hour interval, equivalent to an annual interest rate of 275%. This provides a strong incentive for traders to go long, potentially contributing to further upward price pressure.