Axelar (AXL) Price Slump Shows No Signs of Easing, with On-Chain Metrics Hinting at More Pain Ahead

Axelar (AXL) has seen three days of continuous losses, bringing its price down to $0.6152 at press time, according to data from Binance. The altcoin’s recent slump began on Dec. 16, during which time it has lost 40% of its value.

Over the past month, the cryptocurrency has seen a 27.8% decrease in its price, falling from $1.02 on Dec. 4 to $0.6152 at press time on Jan. 8. Several on-chain metrics hint at the possibility of further downward pressure on the asset.

Among these metrics is the total value locked within the Axelar DeFi ecosystem, which has seen a significant drop of over 27% in the past 30 days.

As of Dec. 18, the project’s TVL stood at $367 million, but according to data from DeFiLlama, it had fallen to $254 million at the time of writing. This decline is a sign of reduced user activity and waning investor confidence.

Furthermore, on-chain data from CoinGlass showed that AXL traders have been ramping up their net exchange flows over the past week.

As traders move their holdings to exchanges, it could indicate their intention to either sell their assets due to declining confidence in the project or to reallocate funds into other projects, which might lead to a price correction in the short term.

Lastly, social sentiment surrounding the altcoin has also turned bearish, with its weighted sentiment currently at -0.818, highlighting increased pessimism among traders.

Demand among derivative traders for AXL has also dwindled over the last five days. According to CoinGlass, the open interest in AXL futures 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 have 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.

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 is 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.

Furthermore, 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.