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Axie Infinity: AXS price risks deeper losses despite 90% drawdown already



Axie Infinity: AXS price risks deeper losses despite 90% drawdown already

Axie Infinity (AXS) has dropped by roughly 90% after peaking out at $172 in November 2021.

AXS’s sharp correction has made it one of the worst performing digital assets among the top-ranking cryptocurrencies. Moreover, it could undergo further declines in the coming months, according to a mix of technical and fundamental catalysts listed below.

Low player count dampens AXS demand

To recap, AXS serves as a settlement token within the Axie Infinity’s gaming ecosystem, allowing players to purchase native nonfungible tokens (NFT), a flurry of digital pets called “Axies.”

It also acts as a work token that players can spend to breed new Axies.

New users that enter the Axie Infinity ecosystem need Axies to pit them in a battle against other Axies. When they win, the platform rewards them with another native token, called Smooth Love Potion (SLP) while winning larger tournaments grants them AXS.

Axie Infinity’s working schematic. Source: Decentralised.co 

As a result, old Axie Infinity players rely on new ones to maintain demand for Axies.

Otherwise, they could risk old players selling their SLP and AXS earnings in marketplaces (for example, crypto exchanges), thus adding downside pressure to their rates.

But when the valuations of Axie Infinity’s native tokens drop, it also makes the game less appealing to new players, who would still need to pay for Axies to be able to earn lower-valued SLP and AXS units.

The Axie Infinity ecosystem has gone through the stages, as mentioned above, in 2022, with its player count dropping to 8,950 in June from 63,240 in January—an almost 85% decline, according to data provided by Dapp Radar. Interestingly, that coincides with AXS’s 80% price drop in the same period.

Axie Infinity statistics since March 2021. Source: Dapp Radar

Simultaneously, Axie Infinity’s in-platform volume, measured after assessing its Ronin chain data, has dropped from $300 million in September 2021 to a mere $2.12 million in June 2022.

At the same time, the project’s top executives have quietly changed their “play-to-earn” mission statement to “play-and-earn,” with its new head of product, Philip La, admitting in his August 2021 post that “Axie Infinity first needs to be a game.”

Axie’s problem is that it’s always been a speculative tool wrapped in rhetoric about fun and community. The developers want it to go back to being just a game, when most players never saw it as a game in the first place. When the earning stops, the playing stops. 12/12

— Joshua Brustein (@joshuabrustein) June 10, 2022

Inflation ramps up

Fresh inflation data has further dampened upside sentiments across the top-ranking cryptocurrencies, which, in one way or another, boosts AXS’s bearish outlook.

Notably, the U.S. consumer price index (CPI) rose by an annual pace of 8.6% in May versus 8.3% in the previous month, heightening investors’ fears that the Federal Reserve will be forced to hike interest rates aggressively in the coming months, which would push riskier assets lower across the board.

AXS/USD versus BTC/USD versus SPX daily price chart. Source: TradingView

AXS dropped 7.5% after the report came out on June 10, and fell by another 7% on June 11 to reach its three-week low of $16.79. The prospect of lower cash liquidity, led by the Fed’s hawkish policies, could result in more losses for the Axie Infinity token.

AXS price slips below key support

The slew of negative fundamentals has sent AXS’s price below a key support level, which may lead to extended downside moves in the coming weeks.

AXS plunged below $18-$19 support range this week, which was instrumental in capping its downside attempts since the beginning of May. Also, testing the range as support had followed up with a circa 800% bull run between July 2021 and November 2021, as shown below.

AXS/USD weekly price chart. Source: TradingView

Now, the path of least resistance for AXS looks skewed to the downside with the next downside target at around $9 by September 2022, more than 50% lower than today’s price. Notably, the $9-level served as resistance during the April-June 2021 session.

Conversely, a bullish cue comes from AXS’s potential “descending broadening wedge” (DBW) pattern on the weekly timeframe, confirmed by the token’s fluctuation between two diverging, falling trendlines.

Related: Metaverse tokens up 400% year on year despite altcoin bloodbath

Traditional analysts consider DBW as a bullish reversal pattern, which, as a rule of technical analysis, resolves after the price breaks above the structure’s upper trendline and rallies by as much as the pattern’s maximum height, as shown in the chart below.

AXS/USD weekly price chart featuring “descending broadening wedge” setup. Source: TradingView

If the pattern is confirmed, AXS would rebound on the path toward $465 within an unspecific timeframe, nearly a 2,500% increase from today’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Record Investment Outflows of $423 Million Led to Crypto Bloodbath



Record Investment Outflows of $423 Million Led to Crypto Bloodbath

Last week saw record outflows of $423 million from crypto assets, according to CoinShares.

The report found that the outflows last weekend were likely responsible for bitcoin’s decline to $17,760. Analyst James Butterfill said: “The outflows were solely focussed on bitcoin, which saw net outflows for the week totaling US$453m.”

BTC outflows bring down institutional investments 

Therefore, if bitcoin is removed from the calculations, Ethereum contributed an inflow of around $11 million while other alts also added minor positive flows, aggregating inflows to the extent of $70 million. 

This was Ethereum’s first inflow after 11 consecutive negative sessions according to CoinShares.

In the past week, the BTC market has slid under the $20,000 level twice. Short-bitcoin saw inflows of $15 million due to the launch of the first U.S.-based short investment product in the week in question, the report noted.

[1/5] This week’s Digital Asset Fund Flows Report is now available! Written by @jbutterfill, the headline for this week is: Record US$423m outflows last week while Short-Bitcoin saw inflows of US$15m. Read on for the highlights -> pic.twitter.com/eIalnFhacv

— CoinShares 👩‍🚀 (@CoinSharesCo) June 27, 2022

Benefits of a crypto bear market

Similar wide margins were last seen in the previous negative peak, in terms of outflows, in Jan at $198 million.

However, in relative terms, Butterfill remarked that the week did not witness the largest negative flows against total assets under management (AuM). 

“This record occurred during the bear market in Feb 2018 where outflows representing 1.6% of AuM were witnessed, while the outflows last week were the third largest on record, representing 1.2% of AuM,” the report noted.

According to FTX CEO Sam Bankman-Fried, the Federal Reserve’s decision to aggressively increase interest rates was the main reason behind the market crash.

But despite the bearish sentiments, some crypto bosses are optimistic about the results of a market downturn. Charlie Silver, founder of Permission.io told Insider: ” There are hundreds of firms that are built on hype and not substance. It will be good for the industry to have them go away.”

“Bear markets are healthy because it resets valuations to reality and flushes out the bad actors. There are many cryptos that are true Ponzi schemes, that pay investors only with new investor money. When the new money dries up the project falls apart,” Silver added.


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch



Uzbekistan warms up to Bitcoin mining, but there’s a catch

The executive order spares all the mined assets from taxation and bans mining anonymous currencies.

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Uzbekistan warms up to Bitcoin mining, but there’s a catch

The National Agency of Prospective Projects (NAPP) in Uzbekistan announced its demands toward crypto mining operators. It would only allow the companies that use solar energy to mine Bitcoin (BTC) or other cryptocurrencies. 

The normative act on the government page, dated June 24, describes the confirmation of “Guidelines on the registration of the crypto assets mining,” and sets the finalization date on July 9. The second article of the document offers an uncompromising wording:

“Mining is being carried out only by the legal entity with the use of electric energy, provided by a solar photovoltaic power plant.”

As a further complication, the miners should own the solar photovoltaic power plant that they will use for energy.

The executive order also obliges any mining operator to obtain a certificate and register in the national registry of crypto mining companies. This procedure demands a brief list of documents, and should take no more than 20 days from submitting to the final decision to the licensing body. The certificates would be valid for one year after the registration.

Related: Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

All the currency generated from mining activities would be spared taxation, though the mining farms would face the special tariffs on the consumed energy set by the Uzbekistan government. But, the trade operations with mined assets would have to be conducted only on the exchange platforms that are registered in Uzbekistan. The mining of anonymous cryptocurrencies would be prohibited.

In April 2022, the freshly-restructured NAPP became Uzbekistan’s exclusive crypto regulator with the mission to adopt a special crypto regulation regime in the country. This move came in a row of initiatives launched by the Uzbekistan President Shavkat Mirziyoyev to provide the regulatory framework for crypto. In September 2018, Mirziyoyev signed a law prohibiting local firms from launching their crypto exchanges in Uzbekistan. The law only offered legal status to crypto exchanges established by foreign legal entities.

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Celsius denies allegations on Alex Mashinsky trying to flee US



Celsius denies allegations on Alex Mashinsky trying to flee US

Celsius CEO Alex Mashinsky wasn’t trying to leave the U.S. last week but has continued to work on recovering liquidity and operations, the company has claimed.

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Celsius denies allegations on Alex Mashinsky trying to flee US

Troubled crypto lending firm Celsius is putting their best foot forward to recover operations alongside CEO Alex Mashinsky, who currently stays in the United States, the company has claimed.

A spokesperson for Celsius has denied rumors that the company’s CEO tried to flee the U.S. last week amid the ongoing liquidity crisis of the Celsius Network.

The representative told Cointelegraph on Monday that the firm continues working on restoring liquidity, stating:

“All Celsius employees — including our CEO — are focused and hard at work in an effort to stabilize liquidity and operations. To that end, any reports that the Celsius CEO has attempted to leave the U.S. are false.”

Celsius’ statement came shortly after Mike Alfred, co-founder of the crypto analytics firm Digital Assets Data, took to Twitter on Sunday to claim that Mashinsky attempted to leave the country last week via Morristown Airport in New Jersey.

Citing an anonymous source, Alfred alleged that Celsius’s CEO was trying to go to Israel. “Unclear at this moment whether he was arrested or simply barred from leaving,” he added.

Alfred’s claims followed a massive GameStop-like “short squeeze” of Celsius, with Celsius’ native token Celsius (CEL) jumping 300% in one week by June 21. CEL price also abruptly rallied more than 600% on June 14, with analysts attributing the event to an exchange glitch or liquidation of short traders.

At the time of writing, CEL is trading at $0.741, down around 5% over the past 24 hours, according to CoinGecko. Celsius’ native token is still up more than 160% over the past 14 days.

Celsius Network token (CEL) 30-day price chart. Source: CoinGecko

Some industry observers in the crypto community have expressed skepticism about Alfred’s tweets about Mashinsky, with many considering his allegations as FUD.

If @Mashinsky attempted to leave the country this week, why are you reporting it now exactly when the CEL price is going down? Seems very coincidental Mike Alfud. And why no mainstream media or crypto media is reporting this? #CelShortSqueeze https://t.co/ynJbzWib9o

— Otis — #CelShortSqueeze ©️ ⚡️ (@otisa502) June 27, 2022

As previously reported by Cointelegraph, Celsius officially announced that it would be “pausing all withdrawals, swaps and transfers between accounts” on June 13. United States regulators subsequently started an investigation into Celsius as multiple accounts on the network were frozen.

Related: South Korean prosecutors ban Terraform Labs employees from exiting the country: Report

According to some analysts, Celsius’ liquidity issues should be attributed to shortcomings of the existing crypto lending model in general, as other lenders in the market have faced similar problems recently.

Celsius has been working hard to fix the consequences of the platform’s liquidity crisis, reportedly onboarding advisers and restructuring consultants to help the platform handle potential filing for bankruptcy. On June 18, Celsius’ lead investor BnkToTheFuture and its co-founder Simon Dixon offered to assist the network by deploying a recovery plan.

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