Axie Infinity (AXS) has been forming a giant bearish reversal pattern since July of last year, which could drop its price by another 95% in 2022.
AXS risks another big drop
Nicknamed “reverse handle mug”, the pattern is identified by its large crescent shape followed by a modest breakout to the upside. It usually resolves after the price breaks out of the ascending channel, followed by another break below the cup and handle support.
Meanwhile, as a rule of technical analysis, a breakout of rate and handle reversed brings the price to the level at length equal to the maximum distance between the top of the structure and the support.
The AXS price rally during the second half of 2021, followed by its sweep in 2022, forms a crescent-shaped trend, which looks like an inverted cup. Furthermore, the recent 50% price bounce from the June 18 local low of $11.82 forms an inverted handle, as shown below.
Therefore, AXS technicals look skewed to the downside as it breaks below the inverted handle range with a breakout target of $1, which is roughly 95% down from current price.
Bad publicity hurt Axie Infinity
The extreme bearish outlook appears mainly on the back of a negative trend in other parts of the cryptocurrency market. However, AXS also suffers from Axie Infinity’s vision of sustaining a gaming platform that pays its user to play.
Additionally, bad press, “bad publicity,” including a $600 million hack earlier this year, has also dampened demand for AXS, which serves as the governance token and official currency within the Axie Infinity ecosystem.
That’s visible in Axie’s monthly revenue performance, which is down more than 98% from its August 2021 peak of $364.4 million, according to data tracked by Token Terminal.
But Axie Infinity might not go away entirely, Cointelegraph’s Yanto Chandra argues in his op-ed, noting that the project would “reinvent itself and chart a new destiny in the changing GameFi landscape.”
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