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XAI price tests lower boundary of ascending parallel channel amid growing gaming narrative.
XAI could drop 10% to test the $0.70 psychological level despite multiple network integrations.
The bearish thesis will be invalidated once the altcoin breaks above the $1.16 resistance level.
XAI (XAI) price has been consolidating within an ascending parallel channel for the past two weeks. The odds are inclined toward breaking this bullish technical formation as profit-booking intensifies. It comes despite the metaverse and gaming themes steadily gaining ground in the crypto space. The market is also reeling from the Bitcoin spot exchange-traded funds (ETFs) narrative and speculation on similar investment products for Ethereum (ETH).
Also Read: SEC lives up to the expectations as it delays spot ETH ETF; Ethereum price makes no move
XAI (XAI) price recorded over 10% in gains on January 17 off the back of integration with DWF Labs. Specifically, the digital asset market maker launched the sentry nodes on XAI Games, marking the world’s first Layer 3 (L3) solution for AAA (high budget or high profile) gaming.
Meanwhile, the XAI ecosystem shows commitment to building on its mission to onboard the next billion gamers into Web3. It boasts additional integrations with Arbitrum (ARB), including ongoing plans to migrate Crypto Unicorns from the ARB chain to the XAI network.
Notably, XAI is an orbit L3 chain built atop the Arbitrum ecosystem. Offchain Labs developed it to bring exceptional scalability with ultra-fast transactions. Gas is already very cheap on XAI, but as part of the expected partnership, all transactions related to Crypto Unicorns will be free.
XAI price bullish outlook remains intact, for now, until such a time when the $0.53 support will be breached. The Parabolic Stop and Reverse (SAR) indicator shows this, trailing XAI price from below and providing support at $0.70.
Enhanced seller momentum could see the XAI Network price fall out from support provided by the ascending parallel channel with a possible 10% flop to the $0.70 psychological level.
In a worse case, XAI Network price could roll over to test the $0.53 critical support, nearly 30% below current levels.
XAI/USDT 1-day chart
Multiple on-chain metrics from Santiment support the bearish outlook. The volume of XAI tokens is dwindling, moving from a peak of 589.79 million around mid-January to the current 111.15 million. This represents an 81% drop in just about a week. This, backed by the subdued buying power of the XAI bulls, accentuates the bearish thesis.
The subjugation of the buying power is seen by the stagnating percentage of stablecoin total supply held by whales with over $5 million. Between January 20 and 22, this metric dropped from 51.71% to 51.57%, a 0.3% drop in under 48 hours.
XAI Santiment: Volume, Percentage of stablecoin total supply held by whales
Conversely, a resurgence by the bulls could see the XAI Network price push north to test the midline of the channel at the $1.00 psychological level. Further north, the gaming token could test the $1.16 resistance level, or in highly bullish cases, shatter this level and reclaim the range high of $1.23.
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