Axie Infinity Price Prediction [AXS] – A fall in traction translates to all but…

Blockchain games or play-to-earn (P2E) platforms remain dominant within the larger Dapp industry. In fact, a blockchain gaming report by DappRadar

Unfortunately, Axie Infinity, one of the P2E games with notable growth back in 2021, didn’t even make it to the top 5 games in Q1 2023. Alien World led, followed closely by Splinterland. 

The loss in network traction amidst increased competition dented Axie Infinity’s native token – AXS – too. 

AXS is yet to break a key long-term trendline resistance on the daily chart to signal a bullish return. 

So, to what extent did the network traction decline affect AXS’s price performance in 2023? 

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AXS’s UAWs in 2023

One way to track blockchain games’ popularity and traction are through UAW (unique active wallets) and user activity. 

For perspective, Alien World, the top-performing P2E in Q1 2023, had an average of 223k daily UAWs (dUAWs). For Axie Infinity, the UAWs hovered around 10k. 

The highest UAWs Axie Infinity hit in Q1 2023 was 17.98k on 23 January, according to DappRadar. After that, the blockchain gaming platform has seen dwindling UAWs. 

Source: DappRadar (Axie Infinity’s Unique Active Addresses)

However, at press time, the metrics stood at $1.2 million and 28.8k, respectively – A sharp drop that affected AXS’s price performance too. 

AXS price prediction – Sellers to gain more ground?

Source: AXS/USDT on TradingView

On the daily chart, price action was below the 50 and 100 EMAs, indicating that sellers had the upper hand.

Interestingly, since August 2022, AXS has failed to break above key trendline resistance. The uptrend seen in January faced rejection at the trendline resistance.

Despite rallying from $5.94 to $13.94  and posting over 130% gains in January, bears still have the upper hand because price action was below the trendline resistance. 

In March, price action fell below the moving averages (50 and 100 EMA), indicating sellers gained more influence towards the end of Q1 2023. 

Meanwhile, the RSI (relative strength index) was in the oversold zone – Reiterating sellers’ leverage. As such, sellers could attempt to sink AXS to its December lows of $5.93 or November swing low of $4. 

However, CMF (Chaikin Money Flow) had an uptick and rested on the neutral zero level, signalling considerable capital inflows to AXS. 

Any potential uptrend could face rejection at the moving averages or the trendline resistance near $8. Bulls must clear these obstacles to gain the upper hand and retest $9.63.

Q2 starts on a negative sentiment

Source: Santiment

How much are 1,10,100 AXS worth today?

However, bulls’ effort could be stalled further in Q2 if on-chain metrics from Santiment hold for the rest of May and June. 

Notably, the supply on exchanges spiked significantly in April, indicating short-term selling pressure as more AXS moved to exchanges to be offloaded. 

At the same time, supply outside exchanges stagnated, indicating limited demand and accumulation. This highlighted the short-term bearish pressure witnessed towards the start of Q2. 

Similarly, the weighted sentiment flipped to negative territory and remained in that position for most of April. The sentiment was still negative at press time, capturing dented investor confidence amidst increasing macroeconomic uncertainty. 

Nevertheless, it is worth noting that supply on exchanges eased slightly in May – A dip in short-term selling pressure. There was also slight accumulation, as shown by the supply outside exchanges (yellow) spike over the past few days. 

Although this could offer bulls little hope, Bitcoin [BTC] was stuck at the $27k price zone at press time, making a strong AXS recovery far-fetched. 

Conclusion

Axie Infinity’s declining traction has spilled into its native token AXS’s price performance.

Despite rallying by over 130% in January, stunted network traction has weighed down on AXS. On the quarterly front, AXS posted about 40% gains in Q1 2023, following BTC’s impressive performance.

But the gaming platform has ceded ground to Alien World, Splinterlands and other P2E games, which could affect investors holding AXS.

The ongoing market uncertainty could further complicate AXS’s price performance in Q2.