beincrypto.com
Axie Infinity’s month-on-month growth has trended negative since the close of January 2023. Another 16% decline in March has raised bearish concerns among crypto investors. Where will AXS find support?
On March 10, Axie Infinity (AXS) reached a local low of $7. It briefly rebounded toward $9.7 on March 19 but has been met by fierce resistance from the bears. Among other underlying on-chain metrics, the decline in whale activity and failure to attract new demand suggests that AXS could soon retest $7.
AXS Whales Go Missing In Action
Axie Infinity currently ranks third among the largest GameFi projects based on market capitalization. However, the price has steadily declined since reaching its year-to-date high of $13.42 on Jan. 23. Notably, the AXS price drop has coincided with a comparable decrease in the volume of whale activity across the popular network.
According to the data compiled by Santiment, since the recent local high on March 19, AXS transactions exceeding $100,000 dwindled from 52 transactions to just 4 transactions recorded on April 5. The chart below shows that a 7.5% price downswing has closely followed the dearth of whale activity within the same period.
Evidently, there has been a close correlation between price action and the activity of AXS whales in the past 3 months. If the dwindling trend does not reverse, AXS holders can expect more downside in the coming weeks.
Likewise, the slowdown in new user acquisition further validates the bearish outlook for AXS. Another Sentiment chart below shows how the Axie Infinity Network Growth has decreased along with the price since January.
Since hitting 421 on Jan. 23, the number of newly created addresses decreased by 88% to reach 57 AXS wallet addresses as of April 6.
Network growth tracks the rate at which new users and network participants buy into a project. Such a drastic decline, as observed above, signals that the underlying token may struggle to find new demand.
AXS Price Prediction: A Retracement to $7 is on the Cards
IntoTheBlock’s Exchange On-chain Market Depth chart suggests that if AXS cannot hold its $8.50 support, it will likely decline 5% toward $8. At this point, however, the bulls looking to buy 88,000 tokens can stop the slump.
But if that support does not hold, a sharp 20% decline toward $7 may be the next move. But at the $7 zone, a buy-wall of 130,000 AXS tokens will likely stand firm and force a rebound.
Conversely, AXS can enter a bull rally if it can scale the $9 mark. Although, the traders looking to sell 57,000 tokens around that price could prevent the move. But if that resistance is breached, AXS can tear toward $10, where a massive sell-wall of 111,000 tokens lies in wait.