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To say Axie Infinity has been on a tear would be an understatement. Its price increased from $48 to an all-time high of $120 in just 12 days, representing a more than 150 percent increase. Spot volumes on exchanges totalled $5.6 billion, making AXS the fifth most-traded cryptocurrency (excluding USDT) in the last 24 hours.
Meanwhile, the play-to-earn behemoth has increased its community presence through massive airdrops and the announcement of a decentralised exchange. The platform has also incentivized its staking capabilities by providing a 240 percent APR.
At the time of writing, AXS was trading at $117.6, up by 50% compared to yesterday’s close.
AXS 4-hour Chart
On the chart, AXS easily surpassed the lows seen on September 21st. Higher highs from $48 allowed AXS to cement an uptrend, but a reversion to $72-support was when the rally first took off. The Fibonacci Extension plotted along AXS’s retracement to $104 suggested potential profit-taking opportunities in the future.
With massive buying pressure gradually easing, the 23.6 percent Fibonacci Extension offered some short-term tailwinds if investors booked their profits. This would allow for a retest of support at $110 and $107 before the next upcycle. Although unlikely, a close below $95 would bring the alt rally to an abrupt halt.
After stabilizing, AXS could target its 38.2% ($128.5) and 50% ($135.6) Extension levels. The 100% Extension level ($165.7) is more of a longer term target.
AXS appeared to be due for a correction based on the RSI’s overbought condition. As of press time, the RSI was already easing from the overbought zone, as buying had slowed in recent sessions. This occurred in conjunction with a bearish crossover along the MACD, which provided sell signals.
The overall trend, however, was not in danger of reversing. The Directional Movement Index (+DI) traded comfortably above the +DI, indicating a strengthening market, while the ADX pointed north of 66, indicating a strengthening market.
AXS must stabilise after such a sporadic jump in such a short period of time. Not only will this be beneficial in the long run, but it will also allow for a more orderly rally.
During this phase, support levels of $110 and $107 would be critical. When buyers press on, they should concentrate on the 38.2 percent and 50 percent Extension levels.