AXL’s recent price slump shows no signs of easing, with on-chain metrics hinting at more pain ahead for the crypto asset.
Axelar, a programmable blockchain interoperability platform with the ticker AXL, fell for three straight days to $0.6152 at press time, bringing its market cap down to $552 million. The altcoin has been in a downtrend since Dec. 16, during which its price has fallen by 40%, with its monthly losses at 27.8%.
Several on-chain metrics suggest that the asset could face more downward pressure in the coming days.
Notably, Axelar’s DeFi ecosystem has lost a big chunk of its total value locked over the past month. Since Dec. 18, the project’s TVL has fallen from $367 million to $254 million when writing, as per data from DeFiLlama. This is a sign of reduced user activity and declining investor confidence.
Additionally, AXL traders have been increasingly moving their holdings to exchanges over the past week, according to data from CoinGlass. Increased exchange net flows could lead to a price correction in the short term as investors might be looking to cash out either due to waning confidence in the project or to move funds into other projects.
Social sentiment surrounding the altcoin has also turned bearish, with its weighted sentiment currently at -0.818, highlighting increased pessimism among traders.
Furthermore, demand among the altcoin’s derivative traders has dwindled over the last five days. According to CoinGlass, the open interest in AXL futures had dropped from $19.9 million on Dec. 4 to $10.44 million at the time of writing.
Another factor contributing to AXL’s recent decline is the prevailing risk-off sentiment, driven by the Federal Reserve’s hawkish stance on interest rate cuts and rising U.S. bond yields, which has unsettled both traditional and crypto markets. Bitcoin’s (BTC) recent drop below $100,000 has further intensified losses in the altcoin market, where volatility and downside risk are typically more pronounced.
Bearish technicals
On the 1-day AXL/USD price chart, the Moving Average Convergence Divergence indicator showed the MACD line (blue) crossing under the signal line (orange), which indicates a bearish price reversal in the short term. This was further confirmed by both lines of the price oscillator pointing downwards and the Supertrend line above the price at press time.
Additionally, the Chaikin Money Flow Index showed a reading of -0.11, indicating mild bearish momentum as selling activity slightly outweighed buying pressure in the market.
However, the token could find some relief as whales have shown increased interest in AXL at current price levels. Between Jan. 6 and Jan. 8, whale wallet inflows rose from 128.48k tokens to 2.59 million. Retail investors could follow suit, as whale investments are often perceived as a bullish signal.
Additionally, the altcoin could recover if Bitcoin stages a strong rebound from its recent losses ahead of President-elect Donald Trump’s inauguration in late January.
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