The Axie Infinity game is no stranger to crypto gamers. The evolution of this Pokemon-inspired game has been unlike any other. However, unlike its growth in the past months, Axie Infinity and its AXS token have failed to perform in the market.
AXS has been the worst performer amongst the top one hundred cryptocurrencies by market capitalization in the last seven days. The token has lost approximately 22% of its value over the last few days, losing nearly $200 million of its market capitalization.
This weblog gives you an insight into the latest events concerning the gaming ecosystem and its token. Continue reading as we unfold different aspects of the AXS token and its ecosystem in the following sections.
Catching Up With Axie Infinity
The Ethereum game Axie Infinity, which features monster combat and is based on collected NFT assets, has so far generated over $4 billion in NFT sales. However, the game’s play-to-earn economy has been in trouble since Sky Mavis released an upgraded Origins edition with improved gameplay and a possible free-to-play model in late 2021.
Recently, the Blockchain research company Chainalysis revealed that investigators had recouped more than $30 million in cryptocurrency funds that had been laundered across exchanges after being stolen in March’s Ronin network hack.
That represents 10% of the money taken in the cryptocurrency robbery, which attacked the bridge linking Ronin to Ethereum at the current price of cryptocurrencies.
AXS Certain Drop: A Budding Downfall?
AXS’s market value is $890 million, which dropped from $1.13 billion in seven days. According to Coingecko, which indicates a loss of over 34.6%, the harm has worsened over the past month.
The coin’s value has dropped by 50% in the previous 30 days. AXS, the 61st-largest cryptocurrency by market value, is now trading at about $8.62.
According to Coinglass statistics, stakes in AXS futures worth $5.1 million were sold off during the previous week. The majority of these liquidations—the remaining 33%—were brought on by long bets that went bust.
The week’s lousy performance caused AXS to decline by 94.8%, down from its all-time high rate of $164.90 in November 2021 and 93.2% over the previous year.
The price of Axie Infinity doesn’t increase after falling.
According to data from the cryptocurrency analytics platform Nansen, the daily volume of transactions of Axie Infinity has decreased to levels seen in mid-July 2021. Additionally, Chinese journalist Colin Wu reported that the play-to-earn game’s daily transaction volume had decreased.
Axie Infinity NFT sales volume on the program Ronin chain has decreased, and active daily addresses are less than 300,000. This is a decline in user activity of more than 70% from Axie Infinity’s peak. With US-based players purchasing in-game coins and NFTs using the Ronin wallet, Axie Infinity’s utility and demand may rise. The ability to make purchases using a debit card was recently added to the wallet.
AXS Token: Why Such A Big Drop?
The $625 million Ronin Bridge attack, which affected an Ethereum sidechain for Axie Infinity, occurred in March of this year, according to ActivePlayer data, and this led to a decline in the number of players who were actively playing. Additionally, a U.Today report states that the $611 million Poly Network heist from last year was surpassed by the Ronin Bridge hack, making it the biggest decentralized finance (DeFi) exploit in history.
According to a U.Today investigation, a North Korean cybercriminal organization called Lazarus Group was responsible for the Ronin Bridge breach. In addition, Axie Infinity intends to distribute more than that 100 million AXS tokens on October 24 that are “held by insiders and early investors,” according to Altcoin Daily, even though the price of AXS is still falling.
At the peak of the cryptocurrency bubble last year, gaming tokens gained attention. They are, however, the ones most negatively impacted by the bearish trend this year as concerns about economic tightness grow.
As the number of users on the platform declines, Axie Infinity has experienced the same situation. As a result, the number of players on the well-known play-to-earn platform has decreased 74% since January. As a result, investors may find games less enjoyable in an extremely bear market.
The market has had a negative response. AXS has fallen 22% over the previous week, and further declines are inevitable. AXS’s technical momentum is poor following the weekly fall. A bearish MACD crossover establishes the tone for the AXS market movement over the coming days.
Previously, the token’s support was located around $4, which was before it was the bullish run last year. The speculated support range suggests that if bulls do not stop further loss around $8, AXS could experience a 50% decline.
The Axie Infinity Decline Is Being Examined
With small weekly advances of 0.6% and 3%, respectively, the top cryptocurrencies, which include Bitcoin and Ethereum, maintained their ground; AXS continues to have a negative connection with the market’s momentum. Fears that the private investors may liquidate their stakes after today’s scheduled unlock and distribution are likely the main factors contributing to AXS’s demise.
Nearly 21.543 million AXS tokens (7.979% of the total supply), valued at around $185.7 million, have been distributed to private advisers and investors over the network. Statistics suggest that the event took less than 15 hours.
Sky Mavis, the game studio that created Axie, was cited as saying it “will not be selling a single token” of the impending unlock. Instead, as an advisor, the company acts. For $0.08 in 2020, these investors bought AXS. They’ll secure a sizable 10,650% profit if they sell now, locking up a profit for the books.
Reduced User Growth: Another Significant Cause To The Problem
Along with the token unlock, the recent unfavorable price behavior of AXS is probably due to declining user growth. Axie’s struggled to expand, according to data from players who were actively playing; its player count fell from 2.78 million at the beginning of the year to only over 701,447.
Tokens are typically awarded to advisers and investors in the initial stages of a crypto project but not to the general public when it launches. They are instead vested and spread out over time to lessen the selling pressure on the token.
The process assumes that the token market should mature throughout this vesting time and that this massive token unlock won’t significantly impact the token’s price.
Sadly, it doesn’t seem to be the situation for Axie Infinity, the most popular play-to-earn game among cryptocurrency users.
So What’s Next For The AXS Token?
Technical and sentimental signs support a downtrend in the AXS market. AXS is trading at its lowest level for the year in terms of volume. The bear momentum could cause Bitcoin to keep falling and seek support at the $4 bottom.
However, investments can be challenging since the market’s present and future movements are almost unpredictable. Therefore, if you’re an investor willing to enter the dip, waiting will allow you to get sizable returns.