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Is Axie Infinity overheating? AXS price hits record high following 100% QTD rally

AXS, the local token of Axie Infinity, a play-to-earn nonfungible token (NFT) recreation constructed atop the Ethereum blockchain, rallied greater than 100% on a quarter-to-date (QTD) time-frame to refresh a brand new file excessive above $155.

Nonetheless, the cryptocurrency now dangers paring a part of its current profits as a key technical indicator, dubbed the relative electricity index (RSI), flashes its overbought conditions. In doing so, it’d accurate below $90 — nearly a 40% drop.

The bearish outlook surfaces after analyzing the connection among AXS’s fee and its RSI readings. In detail, whilst the RSI rallies above 70, it frequently activates AXS to both consolidate sideways or decrease later.

But in both case, the token finally ends up trying out its 20-day exponential transferring average (20-day EMA; the inexperienced wave withinside the chart below) as an period in-between aid level.
AXS/USD every day fee chart providing its reaction to RSI readings above 70. Source: TradingView

For instance, RSI has closed above 70 3 instances because July 1, 2021, and every time brought on the fee to hit its 20-day EMA inside seven to 30 days. That made shopping for AXS in opposition to an overbought RSI analyzing a unstable preposition for investors, growing their chance of going through short-time period losses.

As a result, the Axie Infinity token should undergo a comparable bearish trajectory withinside the days/weeks ahead, with its subsequent disadvantage goal sitting around $87. Nonetheless, if the fee rallies in addition ahead, as took place after July’s overbought signal, AXS’s bearish goal should pass to or above $90.
Is hodling a higher strategy?

The 20-day EMA served as a purchase indicator for investors following the RSI-led corrections. In detail, investors determined to shop for the dip in anticipation that AXS’s fee might retest and near above its preceding excessive levels.

Therefore, it’s far seen that investors who did now no longer promote their AXS holdings at some point of the fee corrections closer to the 20-day EMA controlled to earn respectable paper profits — the Axie Infinity token has climbed greater than 2,500% because July 1.

AXS’s developing software withinside the Axie Infinity digital world, referred to as Lunacia, has emerged as one of the number one catalysts in the back of its call for amongst game enthusiasts and investors. In detail, gamers maneuver colourful creatures referred to as Axies to earn sorts of tokens.

The first, called Small Love Potions (SLP), is offered for a success battles; it is able to be cashed out or be reused to reproduce new Axies. Meanwhile, the second one token, AXS, may be earned with the aid of using triumphing seasonal tournaments or promoting Axies in Axie Infinity’s devoted in-residence marketplace.

As of Monday, Axie Infinity’s lively person be counted number tallied to 1.eighty five million, up over 4,500% because April, with its overall cumulative sales mountain climbing to $815 million withinside the identical period, as according to Token Terminal. That made Sky Marvis, the organization in the back of Axie Infinity, the fifth-maximum treasured online game organisation globally with the aid of using marketplace capitalization.
Top gaming corporations withinside the world. Source: Messari

The robust basics have intensified investors’ self belief in AXS, and is the reason its cappotential to get better each time after present process a pointy correction closer to its 20-day EMA.
AXS staking service, DEX release

The cutting-edge bout of purchasing withinside the Axie Infinity markets additionally surfaced because of a brand new function that lets in AXS holders to stake their tokens to earn yields. Since its release on Thursday, the staking function has attracted greater than 12.forty four million AXS tokens (~$1.88 billion at contemporary rates).
AXS staking dashboard. Source: Axie Infinity

Staking efficiently takes lively token deliver out of circulation, which, in opposition to a growing call for for the asset, has a tendency to push its costs higher.

Related: Massive airdrop and AXS staking catapult Axie Infinity to a brand new all-time excessive

Meanwhile, Sky Mavis introduced that it’d release a decentralized alternate on Ethereum-connected sidechain Ronin. In doing so, the organisation goals to make sure quicker AXS and SLP liquidity to gamers at some point of gameplay with no need to depend on cross-chain bridges to buy or switch tokens.

The perspectives and evaluations expressed right here are entirely the ones of the writer and do now no longer always mirror the perspectives of Every funding and buying and selling pass entails risk, you ought to behavior your personal studies whilst creating a decision.