- AXS price is up 317% for the month, marking the best monthly return since data going back to November 2020.
- Axie Infinity six-hour Relative Strength Index (RSI) flashing a bearish momentum divergence with the price.
- 261.8% Fibonacci extension of the April-May correction is approximately 10% away from the current price, offering a new challenge.
AXS price has displayed incredible relative strength since the June 22 low, outpacing all of the cryptocurrencies on the watchlist by a sizable margin. The resulting overbought condition and elevation to an important Fibonacci extension level introduce some doubt about the rally’s sustainability from the current price. It is time to contemplate a minor correction for Axie Infinity to release the price compression in the coming days.
AXS price meets technical warning signs as rally extends
Axie Infinity has exploded onto the scene with a feverish rally of 760% since the June 22 low of $2.78. In fact, there have been only four down days over the 22 days, with the worst loss coming in at just -11%. Due to the velocity of the AXS price advance, the daily RSI has sustained extreme oversold readings since July 7.
It is a remarkable development in the cryptocurrency market and an interesting story for a protocol that draws inspiration from CryptoKitties. As outlined in an FXStreet article on July 13, Axie Infinity “is a blockchain-based trading and breeding game that is built on the Ethereum blockchain.” Key to its widespread adoption has been the friendly and popular free-to-play model that has enabled it to climb past PancakeSwap and other notable dApps in terms of cumulative revenue.
The compelling fundamental story and the resulting AXS price advance have carried the digital token near the significant 261.8% Fibonacci extension level of the April-May correction at $26.40. It is a new technical challenge for Axie Infinity and maybe the only one since the breakout above the previous all-time high of $11.75.
AXS/USD daily chart
The emerging bearish momentum divergence on the six-hour chart adds to the potential for an AXS price setback. The RSI does not confirm the recent price highs, suggesting that the Axie Infinity advance’s momentum is waning. Fading momentum is always discovered on the intra-day timeframes before it manifests in the daily chart, but the momentum divergence is not an explicit sell signal.
AXS/USD 6-hour chart
At this point, there is no definitive sell signal unless AXS price tags the 261.8% extension level now. However, suppose Axie Infinity does commence a corrective process. In that case, there will be substantial support at the intersection of the 38.2% retracement level of the June-July rally at $16.26, with the 10-day simple moving average (SMA) at $15.98 representing a 36% fall from the current price. A failure to hold that range would introduce the potential for a test of the 50% retracement level at $13.69.
It is a challenge to call tops, but the emergence of the 261.8% extension level combined with the building momentum divergence on the intra-day timeframes does begin to stack the probabilities in favor of at least a mild Axie Infinity correction. The exact timing remains fluid.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
US presidential election outcome could shape the future of crypto
US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).
Bitcoin ETFs beat Gold ETFs with 65% gain since launch
Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand
Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.