Axie Infinity, the popular blockchain-based game, has recently displayed robust short-term bullish momentum. However, there are indications that prices may experience a decline over the upcoming weekend. In such a scenario, the former resistance level around the $5.1 region could be a retested support level. This article analyzes the current market trends and explores the potential buying opportunities that may arise.
On Tuesday, 20 June, Axie Infinity [AXS] surpassed a local resistance zone between $5 and $5.2. This region had previously acted as a formidable barrier since 10 June. Notably, the H4 price charts for most altcoins demonstrated a bullish trend, indicating a recovery after a recent pullback spanning 36 hours.
AXS followed a similar trajectory and exhibited a bearish divergence with the price. However, despite the bearish sentiment prevailing in higher timeframes, the shorter timeframes, such as the 1-hour and 4-hour charts, showed promising signs from the bulls.
The trajectory of Bitcoin [BTC] at the time of writing remained bullish. BTC’s bulls retained the $30k level, even after a temporary dip to $29.6k-$29.8k. This stability was crucial for the altcoin market, including Axie Infinity, as they rode the positive sentiment surrounding BTC and Ethereum [ETH].
Although AXS could lose its hard-fought gains if the market sentiment changed, the current evidence favoured a bullish scenario. A bearish divergence (orange) between price action and RSI indicated a likely drop for Axie Infinity. However, the H4 market structure remained bullish, and the trading volume exhibited an upward trend. Moreover, the OBV (On-Balance Volume) had shifted a resistance level of the past ten days into a support level, suggesting increasing buying pressure.
Considering the search for liquidity and the potential for market volatility, the approaching weekend and Monday’s trading session could play significant roles. AXS might dip below the H1 short-term support at $5.35 to trigger stop-loss orders or retreat to the $5-$5.1 region to address the imbalance created during the pump to $5.5. Such a dip could present a favourable buying opportunity, with the target at $6.
Furthermore, the Open Interest, an indicator of market activity, has recently risen by nearly $7 million over the past three days. In tandem, Axie Infinity recorded gains of approximately 14%. While the OBV continued demonstrating intense buying pressure, the spot CVD (Cumulative Volume Delta) from Coinalyze indicated the opposite trend.
Over the last 48 hours, a noticeable downtrend emerged, reinforcing the possibility of a short-term pullback. The significantly negative funding rate also suggested that most of the market had taken a short position.
A potential revisit to the $5.1 region in Axie Infinity’s price trajectory presents an attractive buying opportunity, with a clear invalidation point should prices drop below $4.8. Traders and investors should closely monitor the market dynamics, as the weekend and the negative funding rate could contribute to increased volatility.
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.