The price of Axie Infinity (AXS) fell sharply on June 1, suggesting that its supersonic gains of the past two days could have been part of a bear market rally..
AXS/USD soared 54% so far this week to break above $28 on May 31, its highest level in three weeks. Nevertheless, Axie Infinity price failed to hold gains, correcting over 21% to $22while increasing the possibility of further falls.
The behavior of the operations in the last 24 hours supported the bearish perspective, and AXS/USD trading volume increased during May 31 sell-off.
AXS price bear trend
Axie Infinity’s continued exposure to bitcoin (BTC) and traditional stock markets was also instrumental in driving its prices down on June 1.
In particular, the AXS correction in that period coincided with bitcoin falling from around $32,250 to below $31,500 and a resumption of the bearish trajectory for US stocks following the Memorial Day close on May 30.
Also, AXS price correction started near a confluence of technical resistances, containing support turned resistance around the $27-29 region and the 50 day EMA (the red wave at the chart below) around USD 29.
No V-shaped recovery
If the pullback continues, AXS risks retesting its previous support line near $18.40, down 20% from the current price. At the same timepersistent positive correlation with bitcoin and equity markets could mean further price declines below the $18.40 level.
“There is no V-shaped bottom here,” argues Michael Antonelli, managing director and market strategist at Baird.noting that the factors that led to the fall in all risk assets in 2022 – mainly interest rate hikes – will remain the same in the coming quarters.
Meanwhile, the independent market analyst PostyXBT believes that AXS needs to close above $40 to validate a long-term bullish bounce. Until then, the AXS/USD pair remains at risk of further declines..
“Play with the relief rebounds, but don’t overdo it,” told them PostyXBT to his 79,200 followers on social networks.
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