Axie Infinity is a popular blockchain-based game where you can purchase, raise and battel cute little monsters inspired by Nintendo's beloved Pokémon series. These monsters are stored on the blockchain as NFTs and can be traded or sold. Also, Axie Infinity follows the play-to-earn model, so the more you play and the more battles you win, the more you earn.
Like most other cryptocurrencies, 2022 hasn't been kind to Axie Infinity and its native governance token, Axis Infinity Shard (AXS). As of December 4, AXS was down nearly 93 percent YTD, trading at $6.70. However, something changed for the gaming token over the next few days as AXS found itself trading at $9.50 by December 6. This marks a 41 percent increase in just two days.
While AXS has handed back some of its gains and is currently trading at $8.11, it is still up nearly 19 percent over the last seven days. So what is behind this sudden spike, and where is 4AXS headed next? Tag along to find out.
So what's behind the AXS price spike?
One of the main reasons for the spike was an update published by the Axie Infinity team regarding its roadmap to decentralisation. On December 5, the platform released a blog post announcing its governance section on Discord. The gaming platform also announced close to 700 AXS community members who would join an inaugural pilot program and "experiment with community governance formation."
The announcement came when the overall market of Metaverse and NFT-focused platforms also witnessed a significant inflow. According to the NFT industry data aggregator, Cryptoslamp, NFT sales volumes increased by nearly 10 percent on December 5. At that time, Axie Infinity's technical indicators were also quite promising. For instance, AXS reached an RSI of about 89 late on December 5, signalling a surge in buying momentum.
On the same day, the pseudonymous co-founder of Axie Infinity also took to Twitter to explain the sudden price spike. "What's going on with $AXS? Not sure but: Axie is the #1 Web3 game by traction (Dappradar), Largest Discord/Twitter in Web3 gaming: 650 K/910K, Governance progress: https://axie.substack.com/p/contributorlaunch, Origins S2, Land Alpha, + more. We're relentless and inevitable," he said in a tweet.
All these factors have caused a decent uptick for AXS. What about the road ahead? Will the token continue on its upward trajectory?
Signs indicate the potential for further gains
While AXS has handed back most of the gains from its Dec 6 high of $9.50, it has managed to stay above the $8 support level. This will give AXS investors some confidence that this latest push has strong legs. Moreover, the coin's 20-day and 50-day moving averages also indicated medium volatility, pointing towards continued gains.
The number of total addresses has also seen a steady uptick over the last few days, rising from 63,800 on December 5 to 64,341 at the time of writing. Moreover, according to an article by CryptoNews.Com, AXS could test its 100-day moving average of $10.43 in the coming days. If AXS rallies above this 100 DMA, it could even test a resistance of $11.60 in the future.
Most investors back this notion. According to a survey by CoinMarketCap, over 400 investors believe that AXS will hit $10 by the end of 2022. The average price prediction from participants of the study was $10.56.
Conclusion
These are all very encouraging signs for Axie Infinity, which has had a miserable year thus far. However, cryptocurrencies are known to be highly volatile, and their prices can fluctuate wildly even after posting the strongest indicators. That's why it is essential to do your research and invest only as much as you can afford to lose entirely.
