Axie Infinity has not been to move above $100 after declining by 19% between 27 December to 1 January. However, higher highs on the RSI suggested that bulls were ramping up pressure in the market. Recovery can be expected should AXS capitalize on this move and register a key breakout.
Axie Infinity 4-hour time frame
Axie Infinity traded close to a demand zone for five straight days but bulls have not gathered strength for a breakout above $98-resistance just yet. The 50-SMA (yellow) posed an additional challenge after flipping bearish on 28 December. However, a single development can quickly change AXS’ fortune.
A close above $98 and the 50-SMA (yellow) are vital for a rally. The move would allow more longs to settle in the market, which would be crucial for AXS to successfully challenge swing highs at $104.1, $106, $112, and $115. However, an external catalyst would be required to solidify AXS above a major resistance line at $122.
Meanwhile, AXS’ demand zone between $89.7-$91.4 would continue to be under focus if bulls fail to advance beyond any of the abovementioned swing highs. Since this defense has already staved off multiple attacks in December, buy orders placed within the region would carry minimal risk.
Indicators
No buy or sell signals were present on any of AXS’ indicators The Awesome Oscillator and MACD (not shown) were bearish-neutral, while the RSI held around 50. The only positive came from the RSI’s recent trajectory. Two higher highs indicated a bit of a bullish divergence with respect to AXS’ price action. However, such divergences are often discounted when the overall trend is bearish.
Conclusion
A single breakout separated Axie Infinity from a price recovery. Investors should watch out for a close above $98 and 50-SMA (yellow) to kickstart a rally. Meanwhile, a demand zone between $89.7-$91.4 would help counter any major pullbacks.