AXS: Why further gains are possible despite…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The lower timeframe momentum and structure of AXS were flipping bullishly.
- Demand might not be sufficient to drive a rally, something buyers must beware of.
Since February, Axie Infinity [AXS] has been trapped in a downtrend. The price fell from $12 back then to $5.9 at press time. Thus, from a technical perspective, that downtrend has not yet been broken.
Read Axie Infinity’s [AXS] Price Prediction 2023-24
However, Bitcoin [BTC] has a bullish outlook on the charts. In the past two weeks, it has fueled the shift toward bullishness in the altcoin market. AXS also showed signs of gaining value on the chart on the H4 timeframe.
Despite the bearish structure at present, AXS showed bullish signsThe 4-hour chart showed that Axie Infinity, which had trended upward since mid-June, flipped its market structure from bullish to bearish on 26 June. On 28 June, the bears forced a sell-off that sent AXS to the $5.43 support level. The CMF sank below -0.05 to show strong capital outflow from the market, and the RSI fell below neutral 50 to highlight bearish momentum.
But $5.43 was an important Fibonacci retracement level alongside $5.515 and $5.62. These levels were plotted based on AXS’ rally from $4.8 to $6.44 that began on 19 June. Therefore, after a retest of these levels, AXS could continue the former upward move.
In the shorter timeframes, the move above the local resistance at $5.74 (white) represented bullish intent. Yet the H4 lower high at $5.95 was an important level for the bulls to breach. If Axie Infinity prices cross above this mark, the H4 structure would favor the buyers once more.
In that scenario, a buying opportunity could present itself, with the take-profit target at the 23.6% extension level at $6.83.
Coinalyze data for the futures market showed little enthusiasm from speculators
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Generally, when prices undergo a rally, the Open Interest climbs with it. This signals strong bullish sentiment in the market and capital flow inward. However, this did not occur during AXS’ bounce from $5.43 over the past 48 hours.
The OI rose by $2 million worth of contracts but promptly retraced most of these gains, showing that sentiment amongst speculators was not yet bullish. At the same time, the spot CVD also failed to break out of its downtrend.