In the dynamic field of cryptocurrencies, Axie Infinity’s AXS token has embarked on a remarkable rise, witnessing an impressive increase of over 35% in the last 24 hours and is currently trading at $9.26. This rally propels AXS to the forefront of gaming cryptocurrencies, with a market cap of $1.4 billion and a circulating supply of 132 million coins.
The driving force behind this impressive recovery can be attributed to a recent major update to the game, which introduces a transformative element to the Axie Infinity ecosystem.
The Evolution of Axie Infinity Transforms the Game Economy
This update focuses on the evolution of Axies, Pokémon-like creatures, giving players the opportunity to enhance their digital companions with additional features and abilities.
Beyond the surface modifications, this development introduces a deflationary mechanism which radically modifies the economy of Axie Infinity. This system can reduce the total number of Axies, which would increase the value of already existing Axies and strengthen the bonds between players and their virtual counterparts.
However, amid this surge, a note of caution is in order. The market rebound and Bitcoin’s push toward $45,000 have fueled AXS price momentum, but there are concerns about a potential sharp correction.
Impatient holders, struggling with losses, become a cause for concern. The rise prompted a significant number of sellers to liquidate their positions, with Coinglass data indicating that approximately $2.4 million in short positions were liquidated, defying bearish forecasts.
As the market adjusts, the data reveals potential for a significant correction. The number of profitable addresses has increased by almost 30%, but is dwarfed by the 51,000 incumbents currently in the red.
AXSUSD currently trading at $9.31250000 on the daily chart: TradingView.com
This scenario suggests that the continued upward trend in AXS price could prompt holders experiencing losses to exit the market in an attempt to minimize their losses.
AXS Technical Analysis: Key Levels and Caution
In terms of technical analysis, AXS established key resistance levels at $10.41, $11.37 and $12.01, with immediate support at $9.09 and additional support at $8.54 and $8.06.
🚀 #AxieInfini (AXS) presents the dynamic movement of the market! 📈 Trading near $9.73 with key resistances ahead. The RSI at 81 signals a strong buying trend, but caution is advised. 📊 Bullish above $9.70 with a target to break above $10.41. Stay tuned for more news! #Crypto #TradingTrends 🌟
–Arslan Ali (@forex_arslan) December 25, 2023
The Relative Strength Index (RSI), a crucial indicator of market sentiment, currently sits at a high level of 81, signaling an overbought situation. While this suggests a strong buying trend, caution is advised as an overbought situation may indicate the potential for a market reversal.
Axie Infinity’s AXS has seen a remarkable rise fueled by a major game update, amplifying excitement across the digital asset landscape as the new year approaches.
Despite this positive dynamic, caution prevails, with market participants wary of a possible correction and impatience among holders struggling with losses.
The unique economic dynamics introduced by the game update add a layer of intrigue to AXS’s trajectory in the ever-changing cryptocurrency market.
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