Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
After reaching the ATH on Nov. 6, Axie Infinity (AXS) started its decline in a bearish channel (white), as the bears continued to test the crucial $46 support.
As AXS enters a low volatile phase, the likelihood of a volatile move in the coming days is much higher. Any close below the $45 support would trigger a short signal while confirming the bearish triangle.
If the support continues, the alt may continue its squeeze phase for a while before adjusting to the long-term trend. As of going to press, AXS was trading at $46,598.
AXS daily chart
Source: TradingView, AXS/USD
The retracement phase marked two down channels (white) on the daily chart as the alt lost nearly 74.4% of its value (since its ATH) reaching its six-month low on February 24. As a result, AXS struggled to swing above its Point of Control (POC, red).
During its descent, the alt continued to break through vital Fibonacci support levels while maintaining the 78.6% level. As a result, AXS has flashed a bearish triangle on the daily chart for the past ten weeks. As the sellers showed their advantage, the gap between the 20-50-200 EMA has widened significantly.
Now the immediate support is vital for the bulls to defend to avoid a major fallout. Any near term bullish comeback would continue to find resistance near the POC and the top trendline of the triangle.
rode
Source: TradingView, AXS/USD
If the RSI commits to its trendline support, it would confirm a bullish divergence. In such a case, AXS would get some thrust to test its instantaneous resistance. The OBV also followed a similar trajectory and insisted not to underestimate purchasing power.
Nevertheless, the MACD lines still struggled to close above the midline as the histogram remained in a tight phase.
Conclusion
One cannot exclude the chances of a rebound in the short term in light of the measurements on the RSI and OBV. But the long-term trends were in favor of the sellers, as shown by the descending triangle.
In addition, the alt shares an 80% 30-day correlation with Bitcoin. So keeping an eye on Bitcoin’s movement is essential in order to make a profitable move.
This post Axie Infinity shorts MUST consider this before selling
was published first on https://ambcrypto.com/axie-infinity-shorters-must-keep-this-in-mind-before-selling/
