AXL's recent price drop shows no signs of abating, with on-chain metrics pointing to more pain ahead for the crypto asset.
Axelar, a programmable blockchain interaction platform with the ticker AXLdown for three straight days to $0.6152 at press time, bringing its market cap down to $552 million. The altcoin has been in decline since December 16, when its price has fallen 40%, with its monthly loss at 27.8%.
Several on-chain metrics suggest further downward pressure on the fund in the coming days.
In particular, Axelar's DeFi ecosystem has lost a large chunk of its total locked value over the past month. As of December 18, the project's TVL has dropped from $367 million to $254 million at the time of writing, according to data from DeFiLlama. This is a sign of reduced consumer activity and declining investor confidence.
Additionally, AXL traders have been moving their holdings to exchanges over the past week, according to data from CoinGlass. An increase in exchange net flows could lead to a price correction in the short term as investors could look to withdraw funds either due to lack of confidence in the project or move funds to other projects.
Social sentiment around the altcoin has also turned bearish, with the weighted opinion currently at -0.818, indicating more pessimism among traders.
In addition, demand among the altcoin's derivative traders has decreased over the past five days. According to CoinGlass, open interest in AXL futures had fallen from $19.9 million on December 4 to $10.44 million at the time of writing.
Another factor contributing to AXL's recent decline is the risk-on sentiment, driven by the Federal Reserve's hawkish stance on interest rate cuts and an increase in US bond yieldswhich has disrupted both traditional and crypto markets. Bitcoin (BTC) recent drop below $100,000 has caused more losses in the altcoin market, where volatility and downside risk are usually more prominent.
Bearish technical characteristics
On the 1-day AXL/USD price chart, the Moving Average Convergence Divergence indicator showed the MACD line (blue) crossing the signal line (orange), which indicates a bearish price reversal in the short term. time This was further confirmed by the two lines of the price oscillator pointing down and the Supertrend line above the price at press time.
Additionally, the Chaikin Money Flow Index showed a reading of -0.11, indicating a slight bearish trend as selling activity slightly outweighed buying pressure in the market.
However, the index could find some relief as whales have shown more interest in AXL at current price levels. Between January 6 and January 8, whale wallet inflows rose from 128.48k tokens to 2.59 million. Retail investors could follow suit, as whale stocks are often seen as a bullish signal.
In addition, the altcoin could recover if Bitcoin step back strong from recent losses prior to the inauguration of President-elect Donald Trump at the end of January.
