Axie Infinity prices rode on a bullish momentum in July and August and began September with a relatively good uptick. However, things may not turn out well in the coming weeks for the NFT game.
While AXS surged 30 percent over the past weekend, setting a new all-time high of $94.85, it risked an 18 percent pullback after it failed to close above the 161.8 percent Fibonacci extension level at $85.23, FX Street emphasized. Axie Infinity did not generate a candlestick or a day's worth of trading prices that would hit past this barrier. Thus, it led to a dip in buying, pushing investors to book profits.
This threatened AXS toward a sharp fall to a $77.50 support level that was set to pull down its price and constituted a massive sell-off.
Axie Infinity Price: Sell-Offs Led to Crash
True enough, when Tuesday came, Axie Infinity took a nosedive, shedding 35 percent of its value in one session and losing up to 45 percent of its value in five days, FX Street said in a subsequent report. After the rally on September 4, sentiment shifted rapidly the next day, with buyers getting a rejection at $92, offering a chance for sellers to take over. This pushed the Axie Infinity price further down.
Bulls tried to push Axie back to the green, buying back and pushing AXS price to acceptable levels. However, they failed and it resulted in what is called as a dead-cat bounce, a temporary short-lived recovery of asset prices from a prolonged slump or bearish trade. Consequently, Axie Infinity suffered its biggest losing day on record for this year.
Axie's crash is certainly not a standalone story, FX Street remarked. There are outside factors such as troubled global markets that has left investors worried, leading to challenges affecting rallies around the world. This could mean AXS value could dip further.
With its price continuing to slide at $69.58, as per CoinGecko, the crash could worsen if AXS breaches below $67.61 and then proceeds to the next barrier at $63.12, which is an 18 percent retracement from the $77.50 support level.
Axie Infinity Price: Recovery Possible If Buyers Push $77.50 Levels
Even with this grim outlook for Axie Infinity's price, a close above $77.50 will be a first sign of recovery, but not an indication of a reversal. Investors would have to wait for a decisive daily candlestick beyond the 161.8 percent Fibonacci level at $85.23 to invalidate the bearish thesis.
If buying pressure continues to intensify, AXS prices could rise 23 percent until it retests the 200 percent Fibonacci level at $104.68.
Axie Infinity is an NFT game created by the Vietnam-based developer Sky Mavis. The game has since attracted more than one million daily players in August, an enormous 200,000 percent rise from just below 500 in July last year, Fortune reported. It is a trading and battling game that lets players collect, breed, battle, and trade creatures known as "axies," which are digitized as NFTs.