After almost two months, Axie Infinity [AXS] eventually pulled out a series of consistently higher dips for two weeks. But the bears have been holding back their influence on the altcoin’s tops for weeks now.

As the current phase tightens, AXS is entering a vital area that could determine the fate of its coming rallies.

The USD 20 zone has become key to potentially triggering a downside breakout. Any close below the lower bound of the Pitchfork would give AXS a short-term setback.

At the time of writing, AXS was trading at $20,697, down 1.76% in the past 24 hours.

AXS 4 Hour Chart

Source: TradingView, AXS/USD

Since the beginning of April, AXS followed in the footsteps of the king’s mint and resonated with the market-wide liquidations. After falling below some crucial price points, the alt sailed around the $20 baseline near its Point of Control (POC, red).

The recent pullback continued to a 10-month low in the $16 zone on May 11. While the buyers have shown resilience, they have failed to boost the volume trend.

With the 20 EMA (green) and POC currently coinciding with the USD 21 resistance, AXS could find it difficult to make an upward move. Furthermore, the past two weeks have marked a bearish pennant after a steep flagpole on the 4 hour time frame.

As a general rule, bearish pennant downward breakouts are more effective on declining trend volumes. As we can see, trend volumes for AXS have fallen during the formation of the current pennant.

So a tight robust close below the lower bound of the Pitchfork would expose AXS to a potential downturn. The bears would aim to test the $16-18 range before any bullish comeback opportunities emerge. Given its high correlation with Bitcoin, AXS could dump its bearish structure if the king’s currency registers a sudden surge in its gains.

rode

Source: TradingView, AXS/USD

The equilibrium of the RSI has returned to resistance mode after the sellers visibly showed their lead in the current structure. Should the bulls maintain support from the 41 mark, AXS could see an extended squeeze phase on the chart.

With the -DI looking north again, the near-term prospects for a bullish recovery seemed relatively slim. By the way, the ADX showed a weak directional trend for the altcoin.

Conclusion

In light of the bearish pennant alongside the bearish trend in volumes, the likelihood of a downside breakout was high. In this case, traders should beware of testing supports in the USD 16 zone.

However, it becomes vital to note that the altcoin shares a 94% 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: This is where AXS could go if the buyers don’t intervene

was published first on https://ambcrypto.com/axie-infinity-this-is-where-axs-could-head-if-the-buyers-fail-to-intervene/

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