Axie Infinity’s (AXS) price has gained 33% over the last 30 trading days. However, the upcoming token unlock even now flashes some bearish signals.
Axie Infinity has experienced renewed market demand in recent weeks. However, according to data from Token Unlocks App, Axie Infinity will unlock 3.63 million tokens on June 22. Here’s how the $22 million token unlock program could impact Axie Infinity’s price.
Investors are Holding on to their Tokens
Notably, Axie Infinity suffered a price correction in the build-up to the previous unlock event in April 2023. However, given that the upcoming unlock program is dedicated to rewarding holders that have staked tokens, AXS has, instead, witnessed a 33% price rally this month.
This can be attributed to Axie Infinity investors who have been staking and holding on to their tokens to participate in the rewards.
Since the start of July, Axie Infinity Mean Coin Age has been rising steadily. The chart below illustrates how it has increased by 40% from 28.9 to 44.2 between July 1 and July 19.
By dividing the total coin age by the total circulating supply, Mean Coin Age evaluates changes in the average duration that investors are holding on to their tokens.
This steady rise in AXS Mean Coin Age indicates a bullish network-wide accumulation wave. It can be inferred that AXS holders are looking to stake their tokens to receive greater rewards during the upcoming token unlock.
However, once the token unlock is completed, things could take an entirely different turn.
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Traders are Queuing Up Orders to Front-run the Token Unlock Sell-Off
On-chain data shows that despite the ongoing 33% price rally, some AXS traders have started to pile on sell pressure. As seen below, crypto traders have placed 792,000 AXS tokens up for sale. Meanwhile, buyers have only placed active orders for 600,000 tokens.
As things stand, the supply of AXS currently outpaces demand by a whopping 192,000 tokens. The token unlock could further exacerbate the market saturation as investors may look to cash in on their rewards.
Hence, if the long-term holders look to book some profit after the Axie Infinity token unlock on June 22, it could effectively nuke AXS’s price.
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AXS Price Prediction: The $5.0 Support is Critical
Considering the on-chain indicators identified above, AXS will likely make one last push to reclaim $6.0. But after the token unlock AXS could retrace toward $4.50.
However, the bears must first scale the critical support level at $5. At that territory, 3,290 investors had bought 3.67 million AXS tokens at the average price of $5.43. They could mount a buy wall to cover their long positions.
Nevertheless, if holders continue to sell off their token rewards, AXS could inevitably retrace toward $4.50.
Still, the bulls have a good chance of retaining control of the market if the AXS price rises above $8 ahead of the Token Unlock. However, this is unlikely because 7,830 investors that purchased 123.4 million AXS at the average price of $7.11 could slow the rally.
Nevertheless, if they can flip the $7 resistance, AXS may rally toward $8.
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