Here is what traders should bet on after AXS increased by 39%

Axie Infinity (AXS) has made a remarkable mark compared to other gaming tokens with an impressive 39% growth in just the past 24 hours. Notably, over the week, this altcoin has increased by more than 50%, bringing the total gain to 93% since the beginning of the year.

In this strong upward trend, AXS leads in trading volume within the gaming sector, reaching the 100 million USD mark for three consecutive days. According to data from CoinMarketCap, the daily trading volume surged over 190%, reaching 326 million USD.

These figures clearly demonstrate AXS’s dominance over other gaming tokens. However, despite the strong upward trend since the start of the year, AXS is still being held back within a major downtrend channel. This raises the question: Is a breakout imminent?

AXS aiming for a breakout from the multi-month downtrend channel

On the daily chart, it can be seen that AXS is approaching the upper resistance zone of the long-standing downtrend channel. This downward trend previously caused AXS to fall to a four-year low in December, before strong buying pressure returned, fueling the current bullish trend.

With the resurgence of the Web3 gaming sector, the bulls may attempt to push the price above the resistance line of the downtrend. If AXS breaks through and stays above the $1.50 level, the price could increase by over 200%, reaching around $4.70.

Source: TradingViewHowever, it cannot be ruled out that the bears will counterattack, preventing the bulls’ rally. If this happens, a reversal trend is not expected to occur, and the price may continue its current trajectory.

AXS price is trapped between liquidity clusters

According to data from CoinGlass, liquidity clusters are mainly concentrated in the $1.30 to $1.60 range. The AXS price has surged as it absorbed liquidity above on the chart.

Currently, most liquidity clusters are centered around the $1.50 level, but some are beginning to appear below this level. This reflects the parallel interest of both bulls and bears in this altcoin.

Source: CoinGlassThe continuous price rally of AXS is largely the result of a short squeeze, removing short orders above the current price. This indicates a risk of a correction, which could trigger long orders below $1.50, especially as liquidity acts like a magnet pulling the price.

Is supply at risk of tightening?

Recently, AXS has significantly reduced its circulating supply after removing the Smooth Love Potion (SLP) rewards in Origin mode, decreasing daily issuance by about 90%. This increases the likelihood of a supply shortage.

On the demand side, the Axie Infinity community has shown strong confidence by voting to allow the treasury to stake 9 million Ethereum (ETH). This is seen as a strategic move to strengthen the long-term outlook for this gaming token.

If supply continues to be restricted while community demand rises sharply, truly committed investors could push AXS to new highs.

Mr. Teacher