Every rise of several tens of percent for a cryptocurrency particularly stands out in this gloomy environment for the market. This Monday, Axie Infinity’s AXS token printed a rise of over 25%. How to explain this and what to expect in the coming days
Axie Infinity’s AXS up
At the beginning of December, one cryptocurrency stands out in particular: the AXS of Axie Infinity. Indeed, the price of the token has printed a nice bullish progression of more than 25% in the space of a day and is trading for 8.5 dollars at the time of writing these lines.
Axie Infinity (AXS) token price rises
As a reminder, Axie Infinity is a Play-To-Earn blockchain game, developed by the studio Sky Mavis. The token is used as an in-game currency to farm small creatures based on non-fungible token technology (NFT).
But then, how do you explain such an increase? From a fundamental point of view, the game is experiencing a significant decline in its user base. According to CryptoSlam’s data, Axie Infinity generated $1.5 million in sales volumes for about 21,000 players in November 2022, compared to almost $800 million and 500,000 players in the same period in 2021.
However, the Axie Infinity team remains very active and has announced that the goal for 2022 is to work on decentralising the game. On December 5, 2022, the team announced the launch of the Axie Contributor program, in which 700 active members have been selected to decide on the future evolution of the game
Technical analysis of Axie Infinity’s AXS
Since its peak at $166 in November 2021, the AXS token price has been on a downward trend, reaching a low point around $4 in November 2022. This fall was part of a relatively long-term downtrend channel, which can be seen in weekly candlesticks:
Axie Infinity AXS price action in a bearish channel
The price of AXS fell to a low of about $4 in early November, marking a wick below the channel. However, the price rebounded strongly and validated the channel resistance line. Such wicks are often caused by strong buying pressure.
At the time of writing, with the current weekly candle, the price is facing a first resistance around 9 dollars materialized both by the middle of the channel and by an old resistance having been a proof during the previous bullish leg of the AXS.
The next few days will be decisive for the AXS: if the price breaks the resistance from above, it is very likely that it will return to test the top of the channel and the next resistance around 13 dollars. If not, then the price should return to the bottom of the bearish channel and mark a new low.
In the short term, caution remains the order of the day. Remember that the time scale is on the order of a week, and that such a bullish movement is often followed by punctual corrections of a few percent, even at the time of a bullish breakout.
