The price of Axie Infinity’s native token AXS rose to as high as $46 yesterday, attributable to an increase in the awareness of the Axie Infinity platform as a gaming project. Data provided by Axie World showed that Axie Infinity earned $196.89 million in July 2021 and in just 5 days in the new month of August, the project has raked in $71.8 million in revenue so far, with almost 1 million daily active users.
What you should know
Axie Infinity is a play-to-earn metaverse powered by the Ethereum blockchain. The gaming project enables players to breed, raise, and trade digital pets called “Axies” which makes the game a blockchain-powered version of the popular Pokémon game.
The native token of the game, AXS, acts as a default currency of the Axie Infinity ecosystem that players use to buy and sell Axies and pay trading fees. It also operates as a governance token, allowing Axie Infinity players to vote on proposed upgrades.
The economic prospects have so far boosted AXS demand among traders. Data intelligence firm IntoTheBlock noted that the number of Axie Infinity token holders grew by 400% since November 2020 from zero to 16.73K addresses.
The AXS price looks rangebound between two levels, with $56.57 acting as interim resistance and $36.48 as a temporary support. As a result, traders increased their upside bets on a rebound from $56.57 and go similarly bearish when the price hits $36.48.
What they are saying
Jeremy Ong and Jayden Andrew, who are analysts at crypto-focused research firm, Delphi Digital stated that, “The interplay between Axie’s revenues and AXS price is noticeable. This makes sense given the majority of revenues come from Axie breeding fees paid in AXS to the treasury, which significantly decreases the circulating supply of AXS, causing a supply-side squeeze.”
AXS holders also receive a 95% of the total Axie Infinity revenue and currently, more than 93% of wallets holding AXS are in a state of profit. As of late, AXS corrects lower specifically after its daily relative strength index breaks above 70, an overbought area. Therefore, buying the AXS top, especially when the area above remains unchartered territory for the token, carries additional downside risks.
With more gamers getting onboarded on the gaming platform, the more demand there is for the token and thus ultimately leads to an increase in price. The token has shown a disconnect from the general trend of tokens which usually follow Bitcoin because of its market dominance. AXS seems to have a mind of its own as demand and supply generally comes from activity on the gaming platform.
The axie infinity platform has 2 native tokens; The AXS which is currently trading $41.60, down 3.85% for the day and the SLP which stands for “Smooth Love Potion”, is currently trading $0.19, down 9.91% for the day, as of the time of writing this report.