Languishing below $5, Axie Infinity (AXS) price is now down 97% from its $166 peak achieved during the 2021 Metaverse rally. An in-depth on-chain analysis examines the likelihood that the top-ranked Metaverse project will make a recovery.
Axie Infinity (AXS) —the top-charting Metaverse project, has been kicked outside the top 50 crypto market rankings. At the peak of the Metaverse rally in 2021, Axie Infinity’s market capitalization reached $9.6 billion. But as of Sept 8, 2023, its valuation has now dwindled by more than 93% to hit $630 million.
On-chain analysis examines if the bears will drive AXS price to zero or if the bulls can stage a rebound against the run of play.
Axie Infinity Community Mounting Last-Ditch Recovery Effort
AXS price dipped below $4.95 around Aug 20. But rather than panic, on-chain data shows that the Axie Infinity network witnessed an optimistic reaction. According to data compiled by Santiment, AXS Daily Active Addresses has been on a steady rise since Aug 21.
On Aug 20, only 176 wallet addresses interacted on the AXS network. But since, AXS network activity has increased gradually, exceeding 200 addresses in all but one trading day since Aug 31.
The Active Addresses metric tracks network activity rate, particularly among retail community participants, by aggregating the number of unique wallet addresses carrying out daily transactions. As observed above, the persistent rise in Active Addresses over the past three weeks suggests that retail investors have swooped in to prevent terminal losses.
Increased network activity typically means increased network demand for the underlying asset. Unsprisinginly, the growth in active network addresses has helped AXS defend the $4.50 support level, halting the panic sell-off at the end of August.
Bullish Traders Have Not Give Up Recovery Hopes
According to Exchange order books, many strategic traders have mounted a considerably high sell-wall to mitigate the danger of Axie Infinity going to zero.
As seen below, crypto traders have placed active orders to purchase 1.25 million AXS tokens around the current prices. Meanwhile, the bearish traders have only put up 1.14 million AXS up for sale.
The Exchange On-chain Market Depth chart depicts the volume of active orders that Axie Infinity traders have placed across recognized crypto exchanges.
The chart above depicts that despite the prevailing bearish sentiment, the current market demand for AXS still exceeds supply by 110,00 tokens. This is a vital signal that the AXS token still has sufficient demand to absorb the looming sell-pressure and prevent Axie Infinity’s price from going to zero.
AXS Price Prediction: Consolidation Around The $5 Range
While the bulls continue to mount last-ditch recovery efforts, AXS will face significant difficulty reclaiming the $5 territory. The In/Out of Money Around Price data, which outlines the purchase price distribution of the current AXS holders, clearly illustrates this.
It highlights that 279 investors had bought 1.05 million AXS tokens at the maximum price of $4.70. Without a significant shift in the market sentiment, they could sell early and trigger another downswing.
But if the bulls can push past that resistance zone, Axie Infinity’s price could avoid edging closer to zero and consolidate around $5 instead.
Yet, if the troubling sentiment surrounding the metaverse intensifies, the bears could potentially trigger a major downswing toward zero. However, 283 addresses had bought 343,580 AXS at the minimum price of $4.37. And if they chose to HODL, Axie Infinity’s price could rebound again.
But if that support level gives way, AXS price could begin to edge closer to zero.
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