The price of Axie Infinity seems poised to go higher, but there are a few limitations that would say otherwise. While the overall outlook for the crypto market is bullish, AXS has a very slim chance of going too high in the near term. And investors should be wary of it.
A warning for AXS holders
The price of Axie Infinity may rise in the near term due to Bitcoin’s bullishness. While this uptrend may seem bullish, it could only be temporary. Especially since two on-chain stats indicated that a bearish fate is likely for AXS.
From a technical standpoint, AXS price needs to break through the $54.66 and 65.05 hurdles to move higher. The removal of these blocks does not indicate the start of a bull rally as this move would not break any market structure. Beyond this barrier, it must produce a higher high above the February 7 swing high of $71.9 on a daily chart to even signal the start of an uptrend.
Simply put, the technical analysis showed that Axie Infinity’s bulls are in for work.
On-chain volume, which is a key indicator of the health of an up or down move, also revealed underperformance at 499.74 million, at press time. This value has fallen from 1.41 billion on Feb. 6, indicating a huge lack of interest from investors.
In addition, the current level of on-chain volume is well below the 200-day moving average. This gives weight to the bearish position for AXS.
Going long on AXS? We will…
While the on-chain volume revealed the state of AXS, the exchange’s offerings flashed a good representation of the potential pressure on the sell side. The number of AXS tokens on exchanges rose from 2.12 million on January 28 to 3.21 million on February 28. This represented a total inflow of 1.09 million tokens.
This influx of tokens on centralized entities is potential pressure on the sell side. In the event of a flash crash, these holders are likely to relinquish their holdings, aggravating the situation and lowering AXS as well.
Therefore, investors looking for long AXS should be wary of the potential sell-side pressures building in exchanges.
The lack of interest seen by the on-chain volume index adds credibility to the bearish statement. This suggests a potential spike in selling pressure could snowball, pushing AXS to $46.19 or lower.
This post Listen to this advice before going long on Axie Infinity [AXS]
was published first on https://ambcrypto.com/heed-this-advice-before-you-go-long-on-axie-infinity-axs/