Axie Infinity (AXS) has been forming a huge bearish reversal pattern since July of last year has many experts predicting that the price of AXS could lose another 95% by 2022.
A significant breakdown is possible
The pattern, dubbed the “inverted cup and handle,” is defined by its large crescent shape, followed by a modest upward retracement. It usually settles after the price breaks out of the rising channel, followed by another break below the cup and handle neckline support.
Meanwhile, according to technical analysis, an inverted cup and handle breakout will lead the price to a level of length equal to the maximum distance between the structure’s top and support.
AXS recovery in the second half of 2021, followed by a complete wipeout in 2022, has created a crescent-shaped trend, which looks like an inverted cup. Furthermore, the recent 50% price rally from June 18 bottom of $11.82 forms a cycle reversal, as shown below.
How does bad news affect Axie Infinity?
The bearish outlook mainly follows the overall downtrend of entire cryptocurrency market. In addition, AXS has also suffered due to Axie Infinity maintaining a paid gaming platform, or the $600 million hack earlier this year, which reduced demand for AXS.
The consequences are evident in Axie’s monthly revenue, which is now down more than 98% from its August 2021 peak of $364.4 million, according to data tracked by Token Terminal.
However, as Cointelegraph’s Yanto Chandra notes that the project will “reinvent itself and chart a new destiny in the fast-changing GameFi landscape,” maybe Axie Infinity probably won’t disappear entirely.
(Reference: Cointelegraph)
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision.
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