Axie Infinity (AXS) Price Dip Incoming? Key Levels and Potential Buying Opportunities

Are you keeping an eye on Axie Infinity (AXS)? This popular blockchain game’s token has been showing some impressive bullish moves lately, but whispers of a potential pullback are starting to circulate. If you’ve been waiting for the right moment to jump in, this might be it! Let’s dive into what’s happening with AXS and explore potential buying opportunities.

Recent Bullish Momentum and the Potential Turn

Just recently, on Tuesday, June 20th, Axie Infinity broke through a significant resistance zone between $5 and $5.2. This area had been a tough hurdle since June 10th. Across the altcoin market, we saw a similar bullish trend on the 4-hour charts, signaling a recovery after a brief 36-hour pullback. AXS followed suit, demonstrating this upward movement.

Signs of a Possible Pullback: What to Watch For?

While the short-term picture looks positive, it’s crucial to be aware of potential headwinds. A bearish divergence has appeared between the price action and the Relative Strength Index (RSI). Think of it like this: the price is making higher highs, but the momentum isn’t quite keeping up. This often suggests a potential price decrease. However, it’s not all doom and gloom! The overall market structure on the 4-hour chart remains bullish, and trading volume has been increasing, indicating strong buying interest.

Key Support and Resistance Levels: Your Trading Guide

• Former Resistance, Potential Support: The $5.1 region, which previously acted as resistance, could now become a support level if the price dips.
• Short-Term Support: Keep an eye on the $5.35 level for immediate support.
• Target Price: If a buying opportunity arises, the $6 mark is a potential target.
• Invalidation Point: A drop below $4.8 could invalidate the bullish outlook.

Bitcoin’s Influence: The Big Brother of Crypto

Let’s not forget about Bitcoin (BTC)! At the time of this analysis, Bitcoin was holding strong above the $30,000 level, even after a brief dip. This stability is vital for the altcoin market, including Axie Infinity. Altcoins often follow Bitcoin’s lead, so its positive sentiment provides a tailwind for AXS and Ethereum (ETH).

Decoding the Data: OBV, Open Interest, and CVD

On-Balance Volume (OBV): A Sign of Growing Buying Pressure?

The On-Balance Volume (OBV) is an indicator that uses volume flow to predict changes in stock price. Interestingly, the OBV has flipped a previous resistance level into a support level over the past ten days. This suggests that buying pressure is indeed increasing.

Open Interest: Increased Market Activity

Another interesting data point is the rise in Open Interest. Over the last three days, it has increased by nearly $7 million, coinciding with Axie Infinity’s gains of approximately 14%. This indicates increased activity and interest in AXS.

Cumulative Volume Delta (CVD): A Contrarian View

However, the spot CVD from Coinalyze paints a slightly different picture, showing a downtrend over the last 48 hours. This reinforces the possibility of a short-term pullback. It’s important to consider all these indicators together for a comprehensive view.

The Weekend Effect: Why It Matters

The approaching weekend and the start of Monday’s trading session could be crucial. Market volatility often increases during these periods due to lower liquidity. Axie Infinity might dip below the $5.35 short-term support. This could be a strategic move to trigger stop-loss orders or to revisit the $5-$5.1 region to fill imbalances created during the recent price surge to $5.5.

Is Now the Time to Buy? Potential Buying Opportunities

So, what does this all mean for you? A potential dip towards the $5.1 region could present a favorable buying opportunity. Think of it as a chance to enter the market at a potentially lower price point before the next upward move. However, remember the importance of risk management. Setting a clear invalidation point, such as a drop below $4.8, is crucial to protect your capital.

The Negative Funding Rate: A Sign of Short Positions

One more factor to consider is the significantly negative funding rate. This indicates that a majority of traders are currently taking short positions on AXS. While this might seem bearish, it can also create opportunities for a short squeeze if the price starts to move upwards, forcing short sellers to cover their positions and potentially accelerating the price increase.

Actionable Insights: Navigating the Potential Dip

• Monitor Key Levels: Closely watch the $5.1 support level and the $5.35 short-term support.
• Consider Dollar-Cost Averaging: Instead of buying all at once, consider buying in tranches if the price dips.
• Set Stop-Loss Orders: Protect your investment by setting stop-loss orders below the invalidation point of $4.8.
• Stay Informed: Keep an eye on Bitcoin’s price action and overall market sentiment.
• Be Prepared for Volatility: Weekends can bring unexpected price swings.

Conclusion: Prepare for Potential Opportunities in Axie Infinity

While Axie Infinity has shown strong bullish momentum, the possibility of a short-term pullback exists. The $5.1 region presents a potential buying opportunity for those looking to enter or add to their positions. By understanding the key support and resistance levels, monitoring market indicators, and being aware of the potential for weekend volatility, you can navigate this situation strategically. Remember to always do your own research and manage your risk effectively in the dynamic world of cryptocurrency trading. Keep those Axies battling!