Axie Infinity (AXS) Must Hold This Key Support level to Avoid A crash

Summary:

After a four-day losing streak, the Axie infinity price is down 30%, as the once-hot play-to earn Cryptos turn lukewarm.

After a four-day losing streak, the Axie infinity price is down 30%, as the once-hot play-to earn Cryptos turn lukewarm.

Axie Infinity (AXS), like Gala Games and Decentraland, reached a record high in November as Metaverse and gaming-related cryptos surged after Facebook rebranded to Meta. However, the cryptocurrency market has turned lower since then, wiping billions of dollars from over-hyped gaming projects. As a result, the AXS token is down more than 40% from the November high, destroying $3.5 billion of market cap in the process. Subsequently, Decentraland has taken Axie’s title as the most-valuable blockchain gaming project. But despite the recent weakness, AXS could still go much lower if it breaks down below a nearby support level.

AXS Price Forecast

The daily chart shows Axie is trending higher in a widening wedge formation. The bottom of the pattern at $90.20 should be viewed as a significant level of support. If the trend support fails, it should trigger an extension lower to the 200-DMA at $66.70. By contrast, a broader risk-off could exceed the 200-DMA, targeting the September low of $48.00.

However, the Relative Strength Index (RSI) at 30.90 is close to oversold, potentially encouraging short-covering. Above the market, the 100-DMA at $11.62 is the first notable resistance level. And successful clearance of the moving average brings the 20-DMA (mid-point of the Bollinger Bands) into view.

In my view, it’s too early to predict an imminent crash, as the low RSI and the rising trend line should provide enough support to keep Axie Infinity afloat. However, Bitcoin is pulling back from yesterday’s high, which could trigger weakness across the board. Therefore, either scenario is possible in the coming sessions.