Axie Infinity (AXS) is currently trading at $4.47 and has been in a downtrend since the beginning of the year, after reaching its 2023 highs in late January. The failure to breach the 50-day Exponential Moving Average (EMA) and the Relative Strength Index (RSI) dropping below 50.0 suggest a bearish momentum may be building up. If the price falls below the year-to-date low of $4.13, it could mark a new 2023 low and drop below the downtrend line.
However, if AXS manages to bounce off the downtrend line and the $4.13 support level, it may prevent a steep decline. A recovery that pushes AXS above the $4.84 resistance level would invalidate the bearish thesis and potentially lead to a two-month high.
Currently, there is a significant amount of AXS that is underwater, with about 2.89 million AXS worth nearly $13 million vulnerable to losses. The Global In/Out of the Money (GIOM) metric shows that this supply was purchased at an average price of $4.52, with the lowest purchase price at $4.39. A decline below these price levels would send this supply underwater, adding 1.59k addresses to the group of investors facing losses.
Axie Infinity (AXS) Downtrend: Factors and Scenarios
As of now, about 93% of all AXS holders are not in profit, and if the additional 1.59k addresses join the loss-bearing group, this ratio would increase to 94.4%. The actions of Whale addresses, which hold about 94.5% of the entire circulating supply of AXS, have a significant impact on the price. However, these Whale addresses have been relatively inactive for nearly 17 months.
Their transaction volume has been averaging less than $5 million since May 2022, with occasional spikes. These spikes have become less frequent in 2023, and the average volume has dropped to $3 million over the past nine months. The lack of activity from Whale addresses is contributing to the price decline, and if it continues, AXS may form new 2023 lows. Therefore, potential investors in AXS should closely monitor the activity of these Whale addresses.