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- Axie Infinity price overextended to the downside.
- Extreme oversold conditions in the AXS oscillators support a short-term bounce.
- Significant gaps now exist between the bodies of the daily candlesticks and the Tenkan-Sen.
Axie Infinity price has followed the broader market lower, with little buying activity or support coming in. The most recent bounce off the $72 value area is where the second largest high-volume node exists.
Axie Infinity price prepares for a standard pullback to test resistance at $85
Axie Infinity price has suffered the same selling pressure that many in the metaverse and gaming token space have experienced. Unfortunately, that pressure is likely to continue as fear, uncertainty, and doubt plague near-term trading activity.
It is likely that when the broader market does recovery, Axie Infinity may have difficulty gaining the same past momentum had as traders look for cryptocurrencies that have better upside potential. This is especially true given how many significant cryptocurrencies did not experience significant gains in 2021.
Despite the muted bullish bias over the long term, Axie Infinity price will likely find a nice bounce here very soon. The Relative Strength Index has moved below the first oversold level in a bear market (30) to just above the last oversold level (20). In addition, the current ‘hook’ higher at a steep angle suggests a strong bounce is likely to occur.
Confirm the probability of a bullish bounce with the Relative Strength Index is the Optex Bands oscillator sitting at extreme oversold conditions. The Optex Bands oscillator made new all-time lows. At the same time, the Composite Index has fallen into a historical support zone.
From a price action perspective, Axie Infinity price shows an oversold market by the gaps between the candlestick bodies and the Tenkan-Sen. Within the Ichimoku Kinko Hyo system, the Tenkan-Sen likes to maintain close contact with the bodies of candlesticks. Consequently, when large spaces open up between the bodies and the Tenkan-Sen, corrections occur, and they often occur quickly.
AXS/USDT Weekly Ichimoku Chart
With the combination of the excessive oversold levels in the oscillators and the gaps within the Ichimoku Kinko Hyo system, a bounce is expected. For this reason, a return to test the Tenkan-Sen as resistance at $85 is likely. Above that, there may be a test of the Kijun-Sen at $90.