What next after AXS smashes critical support level
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- AXS recorded a new yearly low
- Negative funding rate hinted at limited demand for AXS
Axie Infinity’s [AXS] year-long bearish swing touched new lows on 10 June, following the breach of the key $5.92-support level. This critical level heralded AXS’s bullish rally that took it to its year-to-date high of $13.95 in January.
The listing of AXS in the SEC’s lawsuit against Binance and Coinbase may have contributed to its latest price dip, with investors taking a cautious approach.
Read Axie Infinity’s [AXS] Price Prediction 2023-24
In Q1 of 2023, AXS followed Bitcoin [BTC] in posting good results. However, recent price action suggests Axie Infinity could be decoupling itself from the king coin. Especially as BTC reclaiming the $26k price zone had no effect on AXS.
Sellers smash critical support level
Axie Infinity’s bearish swing from the $12.60-resistance level in March saw the gaming token break below the $9.48-support level. Multiple efforts by bulls to reclaim the support level yielded no result with bears standing firm. This saw AXS slowly decline towards the key $5.92-support level.
This support level had formed the base for bullish momentum in December 2022 which saw AXS hit its yearly highs. However, bears took full advantage of the regulatory concerns hovering around AXS to flip the critical support level to resistance.
Meanwhile, the Relative Strength Indicator (RSI) dipped aggressively into the oversold zone, highlighting sellers’ leverage in the short term. The OBV also declined by 6.61M over the last seven days, signalling waning demand for Axie Infinity.
The sharp 22% price drop over the last 48 hours revealed the intense selling pressure on AXS. As such, sellers could attempt to sink AXS to its November swing low of $4. On the flip side, a potential uptrend would need bulls to quickly reclaim the $5.92-support level before pushing for a retest of the $9.48-resistance level.
How much are 1,10,100 AXS worth today?
Negative funding rate hinders bullish rebound
The Funding Rate data from Coinalyze on the 12-hour timeframe showed funding rates have been consistently negative since 6 June. This revealed a huge decline in capital being deployed and highlighted the limited demand for AXS.
The Open Interest (OI) echoed the bearish sentiment across the market. The OI declined alongside the price, hinting at buyers’ exhaustion. This underlined a continuation of the bearish momentum for Axie Infinity in the short term.