Unexpectedly, gamefi tokens such as Axie Infinity are experiencing a significant surge today, following the AXS price breaking through its multi-month resistance level. As the market shows signs of recovery and Bitcoin aims for a breakthrough above $45,000, the AXS price is gathering momentum to trade parallelly with Bitcoin. Nevertheless, there’s growing concern about a potential sharp correction from its recent high, as holders who have faced losses are becoming increasingly impatient.
Axie Infinity Faces $2.4 Million Short-Liquidation
Following the rise of AXS price from a low of $6.5 to a high of $12.5, a significant number of sellers liquidated their holdings. Data from Coinglass indicates that holders of short positions liquidated approximately $2.4 million in positions, as the price movement contradicted their bearish predictions.
Based on current analysis, there’s a possibility that the AXS price may soon experience a significant correction, driven by the growing impatience among holders who have been facing losses. Data from IntoTheBlock indicates an increase in profitable addresses, currently standing at 28.6%.
Nevertheless, the number of addresses at a loss still outnumbers the profitable ones, with approximately 51,000 holders in the red. Under these circumstances, a continued upward trend in the AXS price could tempt these loss-incurring holders to leave the market, aiming to minimize their losses.
Such a scenario could potentially trigger a long squeeze, where even a minor correction may compel holders with long positions to close their stakes, resulting in a sharp downturn in the price chart.
The AXS token saw a 30% price jump, with no major news or events from the company to explain this. Social media updates from Axie Infinity were minor. This price increase is likely due to a growing interest in gaming and metaverse-related crypto among traders.
What’s Next For AXS Price?
The value of AXS experienced a rebound from the 20-day Exponential Moving Average (EMA) at $7.6, and surged to $12.5 on Coinbase, reflecting strong purchasing activity by bullish investors. As of writing, AXS price trades at $10.14, surging over 26.1% from yesterday’s rate.
The AXS price may encounter resistance around the $13 mark, but if the bullish traders maintain their positions without significant retreats, the likelihood of a continued upward trend remains high. Should the buyers successfully push the price beyond $14, it might climb towards $21.
The Relative Strength Index (RSI) indicates an overbought condition. This points to the possibility that the current rally might be excessively extended in the short term, potentially leading to a minor pullback or a period of stabilization. The initial support level is set at EMA20. A fall beneath this level could signify a weakening in the bullish momentum. In that case, AXS price might consolidate within $4-$6.