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Axie Infinity (AXS) Price Drops 30% in Two Weeks: 'No Sign of Buyers'

 


Axie Infinity ( AXS ) is down nearly 30 percent two weeks after it stole $625 million from a Ronin Network hack.


AXS/USD fell to $46.69 on April 11, the lowest since March 16. This suggests that buying sentiment among traders and investors will weaken after the hack.


Independent market analyst TJ claimed there is "no sign of buying" even as the price moves into areas that have historically attracted buying.

AXS has fallen roughly below the demand zone that TJ flagged as a potential reversal point over the weekend, risking the price to slide further towards its $45 support target this week.


Recovery at AXS?

This bleak outlook comes despite Sky Mavis, the company behind Axie Infinity, pledged that any users who lost money in the theft would be compensated. Last week, the company announced that it had raised $150 million led by Binance to fulfill its promise.


Also, AXS is signaling further declines as a death cross has formed on the chart . Such occurs whenever the 20-day EMA (green wave) falls below the 50-day EMA (red wave).

Traders previously used the area around the $45 mark as an accumulation zone . It has recovered 70 percent to around $75 after last testing the support in March. Similar retracements occurred in January and February when the price dropped to around $45.


If AXS tests this key support, it would also cause the RSI to drop below 30. This would signal "oversold". This suggests that Axie Infinity could see a recovery in April.


Falling wedge confirmation required

The AXS price is already "oversold" on the 4 hour chart as indicated by the RSI which stands at 25. Meanwhile, AXS has broken down from its falling wedge pattern despite being theoretically a bullish reversal pattern.

The coincidence of the oversold RSI and the $45 accumulation zone increases the chances of AXS re-entering the wedge zone and breaking out to the upside.


In that case, AXS/USD could move towards $58. This is a key resistance from March 2022, which comes from the theoretical profit target of the falling wedge. The price rises by the distance between its upper and lower trend lines.


Head and shoulders pattern possible

A break below the key support at $45 could trigger a head and shoulders pattern on AXS on the longer timeframes.

That's mainly because the $45 mark serves as the cutout of the pattern. Typically, when the asset breaks below the H&S cleavage, the downside target is the maximum distance between the head and cleavage, as seen in the chart below.

Therefore, there is a risk that the head and shoulders pattern will sink AXS price towards $12 on a significant break below the cleavage.

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