Key Takeaways:
- Axie Infinity plans to unlock 4.89 million AXS tokens on Jan 23.
- Interestingly, AXS price spiked 56% since Jan 22 despite the traditionally bearish update.
NEW DELHI (CoinChapter.com) — The price of AXS, the native token of play-to-earn gaming platform Axie Infinity, spiked more than 50% in two days to reach $13.94 this Jan 23. The uptrend came a day before unlocking millions of dollars worth of AXS tokens, which comprise about 1.8% of its total supply.
Simultaneously, the dollar valuation of AXS’s open interest contracts surged by more than 148% to reach $102.2 million in the past 24 hours. An increase in open interest suggests an influx of bullish funding for a token.
Axie Infinity plans to unlock 4.89 million AXS tokens on Jan 23, currently worth about $63.8 million. Traditionally, an increased supply of a crypto token often corresponds with a price decline. In addition, projects often lock tokens to prevent early investors and team members from dumping their holdings to book profit.
As a result, crypto projects often schedule major announcements around token unlocks so that investors with now liquid holdings refrain from immediately booking profits.
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Furthermore, the trend has made investors expectant of positive news around token unlocks, transforming the bearish catalyst into a bullish one. As a result, bulls are buying AXS tokens in anticipation of positive announcements, while the increased liquidity might attract more buyers to the market.
AXS Price Rally Hits A Wall Near 200 EMA
AXS price surged by 40% on Jan 22, with the Axie Infinity governance token continuing the rally on Jan 23. But bears moved to defend the 200-day EMA (green wave) resistance, forcing AXS to pare gains.
Nonetheless, the rally helped AXS’s price reach a four-month high before correcting. AXS price has followed the wider crypto market recovery, spiking more than 135% from Jan 1’s low of $5.92. The token’s uptrend helped Axie Infinity’s price flip a multi-month descending trendline resistance into support.
Additionally, AXS’s 20-day EMA (red wave) sloped upwards to needle above the token’s 100-day EMA (blue wave) to form a bullish technical pattern called the golden cross. Market participants often consider the pattern an indicator of positive investor sentiment.
Thus, if new buyers enter the market, AXS’s price might exceed the 200-day EMA resistance, near $13.8. Breaking and consolidating above immediate resistance might provide Axie Infinity the momentum to challenge resistance near $16 before paring gains.
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Meanwhile, the relative strength index for AXS is overbought, clocking at 81.71 on the daily charts. Overbought RSI levels often precede a bearish trend reversal, making the pattern a sell signal for traders.
As such, the Axie Infinity token risks falling to support near $12 due to overbought RSI risks. Breaching below immediate resistance could force AXS to shed 16.5% to test support near $10.8 before recovering.
