AXS price

3 signs Axie Infinity price risks giving up its 135% gains in January

AXS price has formed a “gravestone” doji on its daily chart that coupled with its recent token unlock event hint at a potential bearish reversal ahead.

Axie Infinity (AXS) has rallied 135% month-to-date to reach approximately $14 on Jan. 23, its highest level in two months. Nonetheless, the AXS/USD pair could suffer major losses in the coming weeks owing to a flurry of negative technical and fundamental indicators.

Axie Infinity price prints “gravestone” doji

The AXS price formed a “gravestone doji” candlestick on Jan. 23, which technical analysts view as a bearish reversal pattern.

A gravestone doji appears when an asset’s opening, closing, and the lowest price comes to be nearly identical except for the highest price, as shown in the chart below. The long upper wick shows that the bears pared all of the gains printed by the candle during the given session.

AXS/USD daily price chart featuring gravestone doji. Source: TradingView

AXS seems to have been forming a similar candlestick pattern as of Jan. 23, with bears rejecting its advance above the $14 price level, triggering a 10%-plus intraday price drop.

In addition, the rejection came as the AXS/USD pair’s relative strength index (RSI) crossed into overbought territory, coinciding with its price testi the 200-day exponential moving average (200-day EMA; the blue wave in the chart above), which has served as resistance in January 2022 and April 2022.

These three factors have raised AXS’s possibility of undergoing a price correction in the coming weeks. The nearest downside target for AXS comes to be near its 50-day EMA (the red wave) at around $8, or a 40% drop by March.

Axie Infinity total supply expands 1.8%

From a fundamental perspective, the Axie Infinity price could fall in the coming weeks due to its latest supply unlock.

Related: Axie Infinity is toxic for crypto gaming

On Jan. 23, AXS’s circulating supply grew by 4.8 million, about 1.8% of its total supply of 270 million, after a scheduled vested token unlock. Theoretically, more supply could push prices lower if demand does not increase.

AXS price bullish hopes remain

On larger-timeframe charts, however, AXS appears to have formed a falling wedge, which analysts treat as a bullish reversal pattern.

AXS/USD three-day price chart featuring falling wedge pattern. Source: TradingView

AXS’s ongoing recovery run has resulted in its price breaking out of the wedge that’s been in place since May 2022.

In theory, such a move could mean that the price could rise by as much as the the wedge’s maximum height. In other words, the bullish target for AXS price is now around $22.50, up nearly 70% from current prices. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Axie Infinity is painting a giant bearish pattern — will AXS price crash another 95%?

Axie’s monthly revenue has dropped over 98% from its August 2021 peak of $364.4 million.

Axie Infinity (AXS) has been forming a giant bearish reversal pattern since July last year, which could send its prices down by another 95% in 2022.

AXS risks one big breakdown

Dubbed the “inverted cup and handle,” the pattern is identified by its large crescent shape followed by a modest upward retracement. It typically resolves after the price breaks out of the rising channel, followed by another break below the cup and handle’s neckline support.

Meanwhile, as a rule of technical analysis, an inverted cup and handle breakout leads the price to the level at length equal to the maximum distance between the structure’s top and support.

AXS’s price rally during the second half of 2021, followed by its complete wipeout in 2022, makes a crescent shape trend, which looks like an inverted cup. Furthermore, the recent 50% price rebound from June 18’s local bottom of $11.82 forms an inverted handle, as shown below.

AXS/USD three-day price chart featuring inverted cup and handle pattern. Source: TradingView

Thus, AXS’s technicals appear skewed to the downside, given it breaks below the inverted handle range with a breakdown target of $1, down about 95% from the price on July 24.

Bad press hurt Axie Infinity

The extreme bearish outlook primarily appears in the wake of a depressive trend elsewhere in the crypto market. Nonetheless, AXS also suffers due to Axie Infinity’s crumbling vision of sustaining a gaming platform that pays its user to play.

Additionally, bad press including a $600 million hack earlier this year has also dampened the demand for AXS, which serves as a governance token and legal tender within the Axie Infinity ecosystem.

Related: Inflation got you down? 5 ways to accumulate crypto with little to no cost

That is visible in Axie’s monthly revenue performance, which has dropped over 98% from its August 2021 peak of $364.4 million, according to data tracked by Token Terminal.

Axie Infinity monthly revenue. Source: Token Terminal

But Axie Infinity might not disappear altogether, argues Cointelegraph’s Yanto Chandra in his opinion editorial, noting that the project would “reinvent itself and chart a new destiny in the fast-changing GameFi landscape.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.