Over the last few weeks, Axie Infinity’s coin AXS has shown a weaker performance, dropping around 5.42% in the last month following resistance encountered at a significant level.
Amidst the prevailing bearish market sentiment, it is likely that AXS will continue its decline, supported by various metrics that reinforce this perspective.
Downward Trend Sets Stage for AXS Upswing
Following a bounce off the $5.366 resistance zone within the ascending triangle pattern, AXS has started to retreat, with a potential continuation towards the formation’s diagonal support.
Reaching this support level could signal a resurgence in upward movement for AXS, with an initial target around the pattern’s resistance area.
If AXS breaks past this resistance, a subsequent surge of approximately 28.47% is expected, propelling AXS to $6.895. This forecast is based on the measured distance between the resistance and support points within the pattern.
Increased Selling Activity as AXS Faces Pressure
Data from Coinglass, examined by CryptoCrypto, indicates a rising trend in selling activities among traders, hinting at the possibility of further price downturns for AXS.
Recent liquidation figures point to substantial losses for long traders, with a large portion of liquidations in the past day attributed to bets on an increase in AXS prices, signaling a prevailing control by short traders pushing prices down.
Moreover, the current negative funding rate signifies a preference for short positions, reinforcing the downward pressure on AXS as short traders pay long traders to retain their short positions.
Unless these metrics change, AXS is likely to continue its decline until a market structure shift occurs, possibly close to the historical resistance point within the pattern.
Increasing Pressure as Supply Squeeze Develops
Though AXS derivative traders are predominantly leaning towards short positions expecting a price drop, spot market activities suggest a contrasting sentiment as traders gear up for a potential rally.
Recent data from Coinglass shows a withdrawal of $417.88K worth of AXS from exchanges in the last 24 hours, dwindling the available supply and setting the stage for a possible supply squeeze.
This shift indicates an imminent end to the bearish sentiment, with a likely turning point ahead for AXS as the momentum for an upward trend gains momentum.