Disclaimer: The findings of this analysis are the sole opinions of the writer and should not be considered investment advice.
In the past couple of days, Bitcoin has bounced from $34,800 to test the $39,000 resistance level and actually climbed past it on 25 February. This set up short-term buying opportunities across the market as traders tried to catch the altcoins that made some gains. One of these was Axie Infinity’s token, AXS, which climbed past an area of demand after a deviation to the south.
In an article earlier this week, it was noted that $38 could be revisited- but AXS bulls halted the decline at $42. The $44-$48 demand area has, since then, been flipped back to support, and the price has climbed past the $46 mark as well. This advance has been in lockstep with Bitcoin’s rise from $34,800, showing exactly why BTC is hailed as the king.
In the past 36 hours, the price has formed a rising wedge pattern (yellow). This generally sees the price drop, but in this context, the drop might not be more than a pullback.
The drop below $44.5 did not see a sharp drop- rather, it seemed that on shorter timeframes the price had moved down to coax short positions to be opened, before climbing back above $44.5 and $46. This forced the short positions to be closed, which made AXS rise toward $50.
Therefore the smart players have revealed their hand- after hunting the liquidity below $45, they will likely now push toward the next bands of significant liquidity. These are the $55.5 and $63.25 levels.
The RSI and the Awesome Oscillator showed that momentum had been deeply bearish a couple of days back, but has since rebounded back into the bullish territory.
The OBV showed that the rally from $45 had been on the back of genuine demand, and the OBV saw a sharp move northward. A level was marked on the OBV and if buying volume could rise past it in the next few hours, it could see AXS push toward $55.5 and $63 in the next few days.
A lot depends on how Bitcoin’s price action pans out over the next few days. The global markets have rebounded somewhat the previous day- but are closed for the weekend and Monday could significantly change the narrative. Therefore, although AXS presented a buying opportunity between $46-$49, this bias has to be tempered with caution.