YEREVAN (CoinChapter.com) — XAI gaming token dropped 18% in the previous 48 hours to $1 on Jan 17. However, technicals and on-chain metrics indicate more losses ahead for the altcoin as XAI bulls secure their gains. Let’s take a closer look.
XAI Susceptible to Manipulation?
On Jan. 16, the XAI gaming token reached its all-time high of $1.23 after a whopping 130% increase. This growth could be attributed to strategic decisions made by the Xai team, including a $70 million airdrop via the Arbitrum network, which contributed to raising its market capitalization past $320 million. As mentioned, the current cool-off occurred after the peak.
XAI gaming token’s recent listing on Binance, a leading cryptocurrency exchange, also played a significant role in its popularity, making it the second most discussed digital currency on social media on Jan 10, behind Bitcoin.
However, this surge in value needs to be viewed with caution as only 27% of the total supply is currently in circulation, which could potentially impact the token’s future market performance.
In detail, cryptocurrencies with low circulating supplies can be more susceptible to market manipulation. If a small group of holders possesses a significant portion of the available supply, they could potentially influence the price by coordinating buying or selling activities.
Moreover, the trading volumes fell parallel to the price drop on Jan 16-17, which could also indicate market manipulation. A low number of Bears dump their possessions, lowering the price. Notably, a certain drop in activity is typical for cool-offs after a significant rally, which could also explain the current state of affairs. However, potential investors should exercise caution all the same.
Gaming Token to Drop 13%
Furthermore, XAI gaming token technicals don’t paint an optimistic picture for the bulls. The detailed 1-hour chart indicated that the relative strength index (RSI) diverged from the price action. While the price printed higher lows, the RSI insisted on lower lows. Such dissonance could be indicative of a looming downturn.
If the prediction has merit, the next target for XAI would stand at a previous support of $0.87, or 13% lower than the current value. Furthermore, the XAI gaming token price also depends on overall market sentiment. If Bitcoin and the leading altcoins slip, so will XAI/USD.
