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Axie’s acceleration: The AXS gaming token is up 50% — how long will the high price last and is it a good investment?

Andrew Zhoao

News editor

Jan 23, 2023 at 07:23

Axie Infinity (AXS), a governance token of the online play-to-earn (P2E) NFT game, has reached its three-month high of $13.83 (+51,16% compared to the previous day). Even the fact that the monthly number of players on the platform has fallen to a November 2020 low (from 2.73M in January 2022 to 432K now) has not prevented the growth. Let’s look at the reasons for this rally below.

Rising reason

The TokenUnlocks website, which is the dashboard that uses on-chain data to track tokens and inform users of an upcoming event, says the unlock will take place on January 23. As part of it, the creators will unlock 1,8% of the total coins or 4.89M tokens (~$63.32M).

While a token is locked, it cannot be transferred or sold. This helps keep its value at the end of the block period. As a rule, the value of tokens drops after unlocking. This is because there are more coins on the market after unlocking, i.e. the supply rises, then the demand falls, and with it the price.

Now, on the contrary, there is low supply but high demand in the market. The team, knowing that a large number of coins will be unlocked soon, makes the token stronger and works to ensure that the token does not drop too much at the time of unlocking. So there may be an increase before the unlocks. However, it is not always the case, and we have observed  instances when, contrary to the established behavior, the token grew after unlocking.

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Alpha Insights experts also noticed the growth of the coin in the background of the upcoming unlocking.

Current price

At the time of writing, AXS is trading at $12.85, which is 37,83% higher than the day before and 43,87% higher than a week ago. The value peaked at 5:00 a.m. (UTC-5) at $13.83. When compared to the January 22nd low of $8.9696, the difference is 54,19%.

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As for the peak value, it came on November 7, 2021. At that time, the token could be purchased for $157.56. Compared to the current value, the difference is 1039%.

The earlier impressive growth of the coin occurred on December 5, 2022. The token gained 22,7% in one day and grew from $6.8491 to $8.4041. The reason was one of the following:

  • The release of the roadmap.
  • Announcement of more decentralization. Community members who contribute to the development of the product were allowed to decide how resources in the game’s ecosystem will be allocated.
  • Release of the second season of Axie Origin — a card-based strategy game where players collect, own, and use an infinite variety of creatures called Axies to battle.

Price prediction

The main question is whether the coin will be able to maintain its current value. According to The Main Trader researcher, AXS has good support levels of $8.2 to $8.5, and the value could eventually settle at $11.7 and $11.9. The token must not fall below $8 to do so. However, given the upcoming unlock, this is unlikely.

According to investor Beastlorion, AXS is the most deserving gaming cryptocurrency.

“Nice to see Axie Infinity blowing up again. They managed to keep their community alive and thriving despite huge drawdowns in the market. I can’t think of a gaming crypto more deserving,” he said.

In contrast, Wallet Investor experts believe that Axie Infinity’s native token is a bad long-term investment.

“If you are looking for virtual currencies with good return, AXS can be a bad, high-risk one-year investment option. Axie Infinity price equal $12.487 on January 23, but your current investment may be devalued in the future,” the experts say.

On the contrary, Bitcoin Wisdom specialists think that 2023 will be a good year for AXS growth. So, according to the technical analysis, the coin can grow up to $18.45. 

“The growth will be gradual, but experts do not expect significant drops,” they emphasized.

Why has the number of players dropped?

Axie Infinity is a decentralized game developed in 2017 by the Vietnamese studio Sky Mavis, and built on the Ethereum blockchain. In the game, players can collect, breed, and battle digital characters. The game allows users to withdraw their tokens every 14 days.

The game has a fairly high entry barrier. In February 2020, Sky Mavis estimated that a new player would need to spend about $400 to start playing. By August 2020, the cheapest Axie cost about $307. In March 2022, Axie’s minimum price dropped to about $20. As of this writing, the cheapest Axie is worth 0.001 ETH ($1.6), and the most expensive are over a million ETH. You can check the price here.

Axie's price
Axie’s price

On August 4, Axie Infinity was accused of using a Ponzi scheme a fraudulent investment scam that pays off senior investors with money collected from new investors.

“Axie Infinity is a Ponzi scheme wrapped in a video game. New users had to spend money to buy stuff in it, which allowed early users to sell their video-game staff at a profit as long as new users kept showing up to buy it,” analyst Matt Levine said.

On that day, Matt Levine’s words had no effect on the value of the token, but such bad publicity could additionally have a negative impact on the value of the token and its further development. Accordingly, this may be one of the reasons why experts believe AXS is not a good investment. 

In 2021, Sky Mavis launched the Ronin wallet, which allowed players to play Axie Infinity or any other decentralized app running on the Ronin sidechain. However, two years later, in March 2023, hackers broke into the Ronin network and stole about $620M.

Thus, the high entry barrier, fraud allegations, and hacks may have caused a gamers’ outflow.

According to CoinMarketCap, Axie Infinity’s native token got into the top gainers for the last 24 hours along with GMT (+16,09%), OSMO (+15,15%), FLOW (+11,53%), and IMX (10,44%). So you can pay attention to them too.

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