Axie Infinity (AXS/USD) has been one of the worst-hit tokens during the recent downtrend. The coin is currently around 56.9% below its all-time high of $164.90 set on November 6, 2021. Over the past few months, the coin has been on a constant downtrend, but this now seems exhausted.
Axie Infinity signals bullish gains
On January 10, AXS hit a new low of $65.12. This price fell between the demand zone, between $58.22 to $69.22. This signalled an uptrend for the token because the price could attract traders that wanted to book profits during the dip.
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The coin has already shown signs of breaking out to higher levels. The uptrend has already shown signs of forming, as the coin reached around $74.81 on January 19. If AXS maintains this trend, traders should expect to see a bull run towards the $95.07 weekly resistance levels.
If AXS rallies to this level, it would make a 30% uptrend, which could be the peak of its short-term bulls. The next resistance level lies at $107.23, which could bring the coin’s total gains to 47%. However, such levels could be achieved if there is support from the broader cryptocurrency market.
The higher resistance level lies at $124.73. If AXS reaches such levels, a sell-off could be triggered, given that this is where around 700 addresses that hold the token will break even. Additionally, analysis of these processes shows that short-term traders who bought AXS during the past three months are in the loss zone.
When most short-term traders are in the loss zone, long-term traders tend to accumulate more because the risk of a sell-off is low. If long-term traders accumulate more, AXS could be in for notable gains, and the aforementioned resistance levels could be reached.
A downtrend is also possible
There is still a possibility that AXS will push towards lower levels. The prices could drop again towards the demand zone of between $58.222 and $69.22. If it goes below $58.22, the coin will create a new low. If such a downtrend is formed, the bears will kick in, which will eliminate any bullish gains that could be formed by the token. A stronger bearish trend could push the token towards $48.06.
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