Axie Infinity (AXS) has been forming a giant bearish reversal pattern since July final yr, which may ship its costs down by another 95% in 2022.
AXS dangers one huge breakdown
Dubbed the “inverted cup and handle,” the pattern is recognized by its massive crescent form adopted by a modest upward retracement. It sometimes resolves after the price breaks out of the rising channel, adopted by another break beneath the cup-and-handle’s neckline assist.
Meanwhile, as a rule of technical evaluation, an inverted cup and deal with breakout leads the price to the extent at size equal to the utmost distance between the construction’s high and assist.
AXS’s price rally through the second half of 2021, adopted by its full wipeout in 2022, makes a crescent form development, which appears to be like like an inverted cup. Furthermore, the latest 50% price rebound from the June 18’s native backside of $11.82 types an inverted deal with, as proven beneath.
AXS/USD three-day price chart that includes inverted cup and deal with pattern. Source: TradingView
Thus, AXS’s technicals seem skewed to the draw back, given it breaks beneath the inverted deal with vary with a breakdown goal of $1, down about 95% from at present’s price.
Bad press damage Axie Infinity
The excessive bearish outlook primarily seems within the wake of a depressive development elsewhere within the crypto market. Nonetheless, AXS additionally suffers on account of Axie Infinity’s crumbling imaginative and prescient of sustaining a gaming platform that pays its person to play.
Additionally, dangerous press together with a $600 million hack earlier this yr has additionally dampened the demand for AXS, which serves as a governance token and authorized tender throughout the Axie Infinity ecosystem.
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That is seen in Axie’s month-to-month income efficiency, which has dropped over 98% from its August 2021 peak of $364.4 million, based on knowledge tracked by Token Terminal.
Axie Infinity month-to-month income. Source: Token Terminal
But Axie Infinity may not disappear altogether, argues Cointelegraph’s Yanto Chandra in his opinion editorial, noting that the undertaking would “reinvent itself and chart a new destiny in the fast-changing GameFi landscape.”
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