Axie Infinity [AXS] recorded gains of 138% from the swing low to the swing high in January up till the time of publication. The token’s success made the bulls very delighted, and they were exuberant. Nevertheless, there were indications that the customers were out of goods to purchase. This week’s top metaverse news has focused on Axie.
At the time of publication, Bitcoin [BTC] was still holding at $23,000, and it was probable that it would continue to rise. People’s optimism may also cause AXS to increase. Will there be a suitable downturn for buyers to enter long positions was the unanswered question.
There was strong impetus for AXS to rise in January. On January 9, when the price increased and the trading day finished at $7.32, it disrupted the market’s structure on the daily chart and made it positive. The most recent lower high was $7.25 on December 22.
Beginning in 2023, the OBV increased significantly. This indicated that many individuals were purchasing, and the market structure breach strengthened the bullish tendency. A series of Fibonacci retracement levels were created based on the positive movement.
The decline from $10.2 almost hit the 61.8% retracement at $7.52 before rising to $13.94. The OBV did not increase even though the RSI rose. The fact that the surge up was not supported by actual purchasing pressure alarmed the bulls.
Shorter time frames, such as the four-hour, revealed that support lay in the region between $11.22 and $11.4. The price was in a short-term liquidity zone between $10.8 and $11, so it may drop before rising. The price might fall as low as $9.3 if a four-hour session concludes below $10.8.
Open Interest growing, spot CVD dropping
The spot CVD indicated that there was downward pressure even if the OBV did not reach a higher high in tandem with the price. The CVD has been continuously declining over the past several days, indicating that the asset has been under constant selling pressure. However, the Open Interest increased along with the price, indicating an optimistic outlook.
Money entered the market, and the financing rate increased, indicating that people were upbeat. Even though the bears weren’t yet actively selling, it was concerning that the bulls weren’t placing significant offers.
Bullish momentum and structure allow AXS traders to attempt trend trading. A bullish reaction between $10.8–$11.2 can be used to re-enter long holdings in the event of a downturn.
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