Axie Infinity (AXS) has seen its price drop to a three-year low due to an ongoing legal battle with the US Securities and Exchange Commission (SEC). On top of the price decline, on-chain data indicates that players are abandoning the GameFi protocol. The question is, can AXS recover from this bearish trend?
Currently, Axie Infinity has slipped to third place in the global GameFi rankings by market capitalization, trailing behind The Sandbox (SAND) and Decentraland (MANA). The recent price correction was triggered when AXS was classified as a security by the SEC.
Given the overwhelmingly negative sentiment surrounding AXS, what are the chances of a price recovery?
Active Gamers are Abandoning Axie Infinity
The AXS token derives its value from gamers who use it for in-game assets and exclusive access to ecosystem perks and features. However, as the market fear, uncertainty, and doubt (FUD) related to the SEC’s actions spread, active players have started to abandon the GameFi protocol.
On June 10, there were 2,000 active addresses for AXS. But by June 19, that number had dropped by a staggering 89% to only 229 active wallet addresses.
The Daily Active Addresses (DAA) metric measures the demand for a blockchain network’s core service by counting the number of unique wallet addresses that interact with it each day.
The chart above shows that Axie Infinity is losing network traction at a faster rate than the decline in AXS’s price. This indicates potential difficulties for the token in the future.
Whale Investors Have Lost Confidence in AXS
In addition to active gamers, large institutional investors have also lost confidence in the future prospects of AXS. IntoTheBlock’s chart reveals that there have been only 2 large transactions involving AXS in the past 6 trading days, with zero transactions in the last two days.
The “Large Transactions” metric tracks the number of confirmed transactions that exceed $100,000 in value. The chart suggests that institutional investors are increasingly avoiding Axie Infinity.
If whales continue to limit their trading activity, it is likely that AXS will fall below $4 in the coming weeks.
AXS Price Prediction: Bearish Reversal Toward $4
According to IntoTheBlock’s IOMAP distribution data, the price of AXS is expected to experience a bearish downswing towards $3.75. However, the support from the 35 investors who bought 55,000 AXS tokens at a minimum price of $4.70 could provide some stability.
Nevertheless, if this support level fails, as anticipated, the price of Axie Infinity is likely to decline to around $4.05.
However, if the price of AXS manages to rise above $5 against the current market trend, it could invalidate the bearish outlook. But as shown in the chart above, the 1,020 addresses holding 2 million AXS tokens at a maximum price of $5.02 could present significant resistance.
If this resistance level is overcome, the price may have a chance to reclaim the $6 milestone.
Disclaimer
In accordance with the Trust Project guidelines, this article provides price analysis for informational purposes only and should not be considered financial or investment advice. Bitrabo is committed to providing accurate and unbiased reporting, but market conditions can change without notice. It is always recommended to conduct your own research and consult with a professional before making any financial decisions.
