AXS breaks out past two-month range as bulls make their intentions clear
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Axie Infinity saw a sudden, large rally that breached the highs of a seven-week range
- The Fair Value Gap (FVG) and liquidation levels shed some light on how deep a retracement could extend before the next leg upward
Axie Infinity [AXS] noted some gains last week as the crypto market raced higher following Bitcoin’s [BTC] bullish strength. Yet, a deeper look at AXS showed that most holders of the token were “out of the money“.
Read Axie Infinity’s [AXS] Price Prediction 2023-24
After the selling pressure was exhausted a zone of support was created at $4. The recent breakout past $5 halted at $6, a higher timeframe resistance zone that acted as support back in July and August.
The resistance at $5.7 was not convincingly beaten yet
The past two days saw AXS hover just below $5 for a few hours before pushing higher to $6, representing gains of over 20%. The Relative Strength Index (RSI) remained above neutral 50 to signal a bullish trend in progress on the four-hour chart.
The On-Balance Volume (OBV) spiked higher to signal a large influx of trading volume. This volume arrived during the breakout and reinforced the idea of bullish intent. The market structure was also bullish on both the H4 and the daily charts.
The Fibonacci retracement levels highlighted significant places on the chart where AXS could retrace to. $5 and $4.47 have confluence with the range high and mid-range marks respectively. The large Fair Value Gap (FVG) (white box) suggested a dip to $5.4 before another move higher was possible.
The cluster of liquidations around just above $5 was a clue for buyers
The Cumulative Liq Levels Delta was green and fairly large for a token the size of AXS. Therefore long positions could get hunted before a consolidation and the next move. There were multiple long liq levels in the $5.3-$5.6 region that prices could retest.
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This idea went hand-in-hand with the location of the FVG on the chart. A 50% retracement of the gap meant $5.31 in particular was a level that prices could bounce from in the short term. To the north, a breakout past and retest of the $6 level could give another buying opportunity.