How are you all? I hope you are all doing well and adjusting to the current market situation.
While browsing the market charts today, my eyes suddenly fell on Axie Infinity (axs). Those of you who follow gaming tokens or the crypto market regularly may have noticed that the movement of AXS has been quite different in the last 24 hours. I did some data and on-chain metrics analysis, and some interesting things emerged from there that I had to share with you. I felt that it was necessary to understand the reason behind it from a deeper level, not just by looking at the chart.
Let me share my analysis in very simple language.
Why this sudden run? (axs rally)
At the market opening on Monday, I saw thatAXSs had pumped up about 25%, and the price had crossed the $1.50 level. This is undoubtedly good news for those who have been holding this coin for a long time. But the question is, why this sudden volume and pump?
While looking for the root cause, I found that there was a big change in their ecosystem last Thursday. They completed the baxs (bonded axs) airdrop for the first time. Now you may be wondering, what is the difference between normal axs and baxs?
As far as I understand, the main logic behind bringing this basis is great. The tokens that people get by playing games or as a reward are immediately sold in the market, due to which the price of the coin falls. But this box is non-transferable or bonded. That is, you cannot sell it in a hurry whenever you want. As a result, the immediate selling pressure in the market is decreasing. In my opinion, this change in tokenomics has brought back confidence among investors.
Are retail investors coming back?
Trading is no longer based solely on news, so I checked the data on Coinglass. What I saw was quite surprising:
Futures Open Interest (OI): In the past 24 hours, AXS’s open interest in the futures market has increased by almost 55% to nearly $100 million ($99.54 million). This means that a lot of new money is entering the market.
Short Liquidations: Those who thought the price would fall (bearish positions) have been caught in a big trap. About $711,000 worth of short positions have been liquidated, while less than half of the long positions have been liquidated. In other words, the market sentiment is now bullish.
What does on-chain activity say?
While digging through the data on Santiment, I saw that the number of active addresses has suddenly increased. While there were 321 active users on Sunday, it jumped to 410 by Monday afternoon.
The most frightening (and hopeful) thing is the trading volume. While the volume the day before was only 36 million AXS, on Monday it jumped to 181 million! This huge jump in volume confirms that this recovery is not fake, but rather strong demand is behind it.
Technical Analysis: What does the chart say?
I zoomed in a little on the chart. Despite the 25% gain, AXS is still not completely out of danger technically.
The price is currently struggling around the 50-day EMA (exponential moving average) (at the $1.55 level).
If today's candle closes above $1.55, our next target could be the 200-day EMA or $1.79.
The RSI indicator is around 47, which is trying to rise above the neutral zone. And the MACD shows clear signs of reducing selling pressure.
Overall, my analysis says that this movement of Axie Infinity is quite promising, especially since the bAXS mechanism will help reduce selling pressure in the long run. However, it would be wise to wait until the breakout of $1.55 is confirmed as a precaution. And if there is a rejection from here, we should keep an eye on the $1.42 level as support.
The market is quite volatile right now, so it is better to keep your risk management in mind and make decisions. Happy trading.