Axie Infinity price is trading around a crucial support level that is likely to trigger a massive run-up for early investors. On-chain metrics also support this asymmetric, no-brainer, and a bullish outlook for AXS.
Axie Infinity price ready for a quick run-up
Axie Infinity’s price crashed 65% starting on 24 March, which is slightly steeper than the rest of the altcoin markets. AXS went from $74.57 to $26.23 as it sliced through the $45.22 resistance barrier.
However, the bright side to this bleak picture is that AXS dipped inside the two-day demand zone, extending from $15.58 to $27.25. A demand zone is an area where institutions or high net worth investors accumulate, pushing the price higher.
Often, there are unfilled orders in this area and when the price retraces back to this level, the remaining orders get filled, which increases the buying pressure and propels the asset’s price as a result.
Hence, the recent dip into the two-day demand zone is bullish for Axie Infinity’s price. Going forward, investors can expect AXS to trigger a run-up to retest the immediate barrier at $45.23. Clearing this hurdle into a support floor will open the path for bulls to take control and revisit the $72.72 ceiling.
This run-up would constitute a 140% gain and is likely where the upside is capped for AXS.
Source: TradingView/ AXS/USDT 1-day chart
Adding a tailwind to this bullish outlook for Axie Infinity’s price is the nosedive in the 365-day Market Value to Realized Value (MVRV) model. This indicator is used to gauge the sentiment of holders by tracking the average profit/loss of investors who purchased AXS tokens over the past year.
Generally, a negative value indicates that these holders are underwater. Hence, the probability of a sell-off is low. Based on Santiment’s backtests, a value between -10% to -15% indicates that short-term holders are at a loss and long-term holders tend to accumulate under these conditions.
Therefore, the aforementioned range is termed an “opportunity zone,” since the risk of a sell-off is less.
Currently, the 365-day MVRV for AXS is hovering around -122.55%, which is an all-time low in its more than a year-long history. Therefore, the reward-to-risk ratio is extremely skewed and makes perfect sense for long-term holders to accumulate in this zone.
This outlook falls in line with the forecasts made from a technical perspective, which suggests that AXS is due for an explosive move in the second quarter of 2022.
Source: Santiment
