Unexpectedly, gamefi tokens such as Axie Infinity are seeing a significant surge today, after AXS price broke through its multi-month resistance level. As the market shows signs of recovery and Bitcoin aims for a breakout above $45,000, AXS price is gaining momentum to trade alongside Bitcoin. Nonetheless, there is growing concern about a possible sharp correction from its recent high, as holders who suffered losses become increasingly impatient.
Axie Infinity faces $2.4 million short liquidation
Following the AXS price increase from a low of $6.5 to a high of $12.5, a significant number of sellers liquidated their holdings. Data from Coinglass indicates that short position holders liquidated around $2.4 million worth of positions as the price movement contradicted their bearish forecasts.
Based on current analysis, it is possible that AXS price will soon see a significant correction, due to the growing impatience of holders facing losses. Data from IntoTheBlock indicates an increase in profitable addresses, which currently stands at 28.6%.
However, the number of loss-making addresses still exceeds that of profitable addresses, with around 51,000 holders in the red. Under these circumstances, a continued upward trend in the price of AXS could cause these holders experiencing losses to exit the market, in an attempt to minimize their losses.
Such a scenario could potentially trigger a long squeeze, in which even a minor correction could force long position holders to close their stakes, resulting in a sharp decline in the price chart.
The price of the AXS token jumped 30%, with no major news or events from the company to explain this. Axie Infinity’s social media updates were minor. This price increase is likely due to growing interest in gaming and metaverse-related crypto among traders.
What’s next for AXS price?
AXS value saw a rebound from the 20-day exponential moving average (EMA) at $7.6 and surged to $12.5 on Coinbase, reflecting strong buying activity from bullish investors. At the time of writing, AXS price is trading at $10.14, up over 26.1% from yesterday’s rate.
AXS price may encounter resistance around the $13 mark, but if bullish traders maintain their positions without significant pullback, the likelihood of a continuation of the uptrend remains high. If buyers manage to push the price past $14, it could rise as high as $21.
The relative strength index (RSI) indicates an overbought condition. This raises the possibility that the current recovery could be excessively prolonged in the short term, potentially leading to a slight pullback or a period of stabilization. The initial support level is set at EMA20. A fall below this level could mean a weakening of bullish momentum. In this case, AXS price could consolidate between $4 and $6.