Every increase of several tens of percent for a cryptocurrency signifies especially in this gloomy context for the market. This Monday, the AXS token from Axie Infinity posted an increase of more than 25%. How to explain it and what to expect in the next few days?
Axie Infinity’s AXS on the Rise
In early December, one cryptocurrency in particular stands out: AXS from Axie Infinity. In fact, the price of the token is printed a nice progress of more than 25% within a day and trades for $8.5 at the time of this writing.
Axie Infinity (AXS) Token Price Increase
As a reminder, Axie Infinity is a Play-To-Earn type blockchain game, developed by Sky Mavis studio. The token has been used as in-game currencyto breed small creatures based on non-fungible token (NFT) technology.
But how to explain such an increase? From a fundamental point of view, the game is experiencing a significant drop in the number of users. According to data from CryptoSlam, Axie spawned Infinity 1.5 million dollars in sales volume for around 21,000 players in November 2022, compared to almost 800 million dollars and 500,000 players in the same period in 2021.
However, the Axie Infinity team remains very active and announced that the goal for the year 2022 was to work on decentralizing the game. On December 5, 2022, the team announced the launch of the Axie Contributor programwhere 700 active members were selected to determine the future development of the game.
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Axie Infinity AXS Technical Analysis
Since the peak of $166 in November 2021, the price of AXS token has been in a downward trend until it reached a low point around $4 in November 2022. This decline occurred within a relatively long-term descending channelcan be observed in weekly candles:
Price development on AXS of Axie Infinity in a bearish channel
The AXS price fell to low at around $4 in early November, marking a wick under the channel. However, the price rose sharply and came validate the resistance line of the channel. This kind of wicking is often due to strong buying pressure.
As of this writing, with the current weekly light, the price faces a first resistance around 9 dollars materialized both at the center of the channel and by an old resistance that had prevailed during the previous bullish leg of AXS.
The next few days will be crucial for AXS: if the price is going to break the resistance from aboveit is very likely that we will return to test the top of the channel and the next resistance about 13 dollars. If not, then the price should find the bottom of the downtrend channel and mark a new low.
In the short term, caution remains in order. Keep in mind that the time scale is of the order of the week and that such a bullish move often followed by point corrections by a few percent, even during a bullish breakout.
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Sources: CryptoSlam, Axie Infinity press release, TradingView
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