Key Takeaways:
- Axie Infinity's SLP token might be looking at centralization troubles.
- Meanwhile, AXS paints a bearish pattern with a -92% price target.
NEW DELHI (CoinChapter.com) — An unknown wallet has been hoarding Smooth Love Potion (SLP), the in-game currency of the play-to-earn game Axie Infinity.
Michael Benko, a blockchain gamer, shared an article on a blogging platform highlighting a mysterious wallet address that holds nearly 50% of SLP’s total circulating supply of 43 billion tokens. The mysterious wallet also holds 5.2 million AXS tokens.
Per his research, the wallet owner is not Sky Mavis, the team behind Axie Infinity games.
Benko also noted that most of the SLP tokens in the wallet came from the Ronin Binance wallet, suggesting that the unnamed user might have spent millions of dollars on SLP. A single wallet holding more than half the SLP token supply might wreak havoc on the token’s price action.
Moreover, it is still unclear what the wallet’s owner (or owners) intend to do with their holding. Players earn SLP by completing missions or quests in the Axie Infinity game. Benko calculated that it would take players billions of years to mint the amount of SLP the wallet contains.
The gamer and social media influencer also deduced that neither Sky Mavis nor Binance seems to own the wallet. Additionally, it is not a community treasury.
Any single user or wallet controlling a majority of a token’s supply harms the decentralization narrative of cryptocurrencies. Furthermore, a simple understanding of supply and demand shows that the wallet’s owner can easily bring SLP crashing down to zero.
The SLP wallet owner is yet to be identified.
AXS Paints Bearish Pattern That Forecasts Massive Crash
Meanwhile, if SLP crashes or the FUD surrounding the discovery of the whale wallet triggers a sell-off, Axie’s governance token AXS might also get in trouble. This is because the second native token of Axie Infinity has painted a bearish pattern called inverted cup and handle.
In detail, the pattern forms when an asset’s price action switches from bullish to bearish over time, followed by a short-term bullish continuation. The earlier price movement forms a crescent shape similar to an inverted cup, with the bullish rebound forming the handle.
AXS has broken below the pattern’s handle. The price target in an inverted cup and handle pattern equals the length of the pattern’s highest point measured from the inverted cup’s base. Hence, AXS prices might drop to $1, dropping more than 92% from current price levels.
Suppose Sky Mavis or Axie Infinity do not solve the mysterious wallet problem. In that case, the resulting FUD might bring down both tokens of the Axie Infinity ecosystem, especially considering that the wallet also held nearly 5.22 million AXS tokens.
Moreover, the wallet owner also appears to be staking millions of AXS tokens. The staking rewards would further increase the amount of AXS in the wallet, increasing the owner’s share of AXS’s circulating supply.
At writing, AXS was trading at $14.3, up 3.3% daily.
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