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Axie Infinity's native token, AXS, has experienced a remarkable surge of 39% in the last 24 hours, significantly outperforming other gaming tokens. This recent rally adds to an impressive year-to-date gain of 93%, drawing renewed attention from traders and investors in the Web3 gaming space.
Key Takeaways
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AXS has seen a 39% price increase in 24 hours and over 50% this week.
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The token has achieved a 93% appreciation since the start of the year.
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Trading volume has spiked significantly, indicating strong market interest.
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AXS is approaching a critical resistance level within a multi-month descending channel.
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Recent token supply reductions and community staking decisions may influence future price action.
AXS Eyes Multi-Month Channel Breakout
Despite its recent bullish momentum, AXS has been trading within a significant descending channel. This pattern, which saw the token reach a four-year low in December, is now being tested as AXS approaches the upper resistance of this channel. Analysts suggest that a successful break and sustained hold above the $1.50 mark could trigger a substantial rally, potentially exceeding 200% and reaching around $4.70. However, the possibility of market bears intervening and preventing this upward movement remains, which could lead to the continuation of the current downtrend.
Price Action and Liquidity Clusters
Data indicates that AXS's price has been consolidating between liquidity clusters located primarily above $1.30 to $1.60. The recent price rally absorbed liquidity situated above it on the charts. While most clusters are currently above $1.50, some are forming below this level, suggesting continued interest from both bullish and bearish market participants. The sharp price increase was partly attributed to a short squeeze that cleared sell orders, but this also introduces a risk of retracement as liquidity below $1.50 could act as a price magnet.
Potential Supply Crunch and Demand Drivers
Axie Infinity has implemented measures to reduce its circulating token supply, notably by disabling Smooth Love Potion (SLP) rewards in Origin mode. This change has reportedly cut daily emissions by approximately 90%, increasing the likelihood of a supply crunch. On the demand side, the community has demonstrated confidence by voting to stake 9 million Ethereum (ETH) from its treasury. This move is seen as a strong indicator of institutional-grade execution and a reinforcement of the long-term vision for the Axie Infinity ecosystem. If supply remains constrained and demand continues to grow, the token's price could see further upward pressure.
Final Thoughts
Axie Infinity's AXS token is currently at a critical juncture, facing a significant test around the $1.50 level. Its impressive year-to-date performance and recent price surge have captured market attention, but the outcome of this resistance level will be crucial in determining its short-to-medium term trajectory.
Sources
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Axie Infinity – Here’s what traders should bet on after AXS’s 39% hike, MEXC.
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Axie Infinity - Here's what traders should bet on after AXS's 39% hike, AMBCrypto.
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