Each increase of several tens of percent for a cryptocurrency denotes particularly in this gloomy context for the market. This Monday, the AXS token of Axie Infinity printed an increase of more than 25%. How to explain it and what to expect in the next few days?
Axie Infinity’s AXS on the Rise
At the start of December, one cryptocurrency stands out in particular: the AXS from Axie Infinity. Indeed, the price of the token has printed a nice upward progression of more than 25% within a day and trading for $8.5 at the time of this writing.
Axie Infinity (AXS) Token Price Rise
As a reminder, Axie Infinity is a Play-To-Earn type blockchain game, developed by the Sky Mavis studio. The token is used as in-game currencyto breed small creatures based on non-fungible token (NFT) technology.
But then, how to explain such an increase? From a fundamental point of view, the game is experiencing a significant drop in its number of users. According to data from CryptoSlam, Axie Infinity spawned $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 announced that the objective of the year 2022 was to work on the decentralization of the game. On this December 5, 2022, the team announced the launch of the Axie Contributor programin which 700 active members were selected to decide the future evolutions of the game.
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Axie Infinity AXS Technical Analysis
Since its peak at 166 dollars in November 2021, the price of the AXS token has been in a downward trend, until reaching a low point around 4 dollars in November 2022. This fall took place within a relatively long-term falling channelobservable in weekly candles:
Price evolution of the AXS of Axie Infinity in a bearish channel
AXS price fell to a low of around $4 in early November, marking a wick below the channel. However, the price rebounded strongly and came validate the resistance line of the channel. This kind of wicks are often due to strong buying pressures.
As of this writing, with the current weekly candle, the price faces a first resistance around 9 dollars materialized both by the middle of the channel and by an old resistance having prevailed during the previous bullish leg of the AXS.
The next few days will be decisive for the AXS: if the price comes to break the resistance from aboveit is very likely that we will return to test the top of the channel and the next resistance around around 13 dollars. If not, then the price should find the bottom of the downtrend channel and mark a new low.
In the short term, caution remains in order. Recall that the time scale is of the order of the week, and that such a bullish movement is often followed by punctual corrections by a few percent, even during a bullish breakout.
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Sources: CryptoSlam, Axie Infinity press release, TradingView
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