Axie Infinity Begins Recovery Mission – Can AXS Price Push to $6? 

Axie Infinity ($AXS) bears finally broke down the $6 support level on Aug 12 after nearly a month of multiple attempts. Amid growing bearish momentum, on-chain data examines the bulls’ chances of forcing an early $AXS price rebound.

After losing the critical $6 support level, Axie Infinity ($AXS) bulls are now making concerted efforts toward staging an early rebound. As losses begin to mount, will the $5 support break down, or can the bulls begin a recovery from there?

$AXS is Now Approaching the Oversold Region

$AXS price currently sits around $5.37, meaning the leading metaverse token has now shed 24% in value from last month’s peak of $6.90. After a month-long sell-off frenzy, $AXS now appears to have entered the oversold territory.

Evidently, the Network Value to Transaction Volume (NVT) ratio has dropped rapidly since $AXS retraced from the $6 support on August 12.

Between August 12, and August 16, $AXS witnessed a staggering 85% drop in NVT ratio, from 3,571 to just about 507.

Will Axie Infinity ($AXS) Price Rebound? | NVT ratio, August 2023. Source: Santiment

The NVT ratio examines the relationship between the current market capitalization and the underlying transactional activity on a blockchain network volume.

When it drops for an extended period, it signals that the token is now being oversold and could soon be due for a bullish reversal.

If this analysis holds true, the Axie Infinity bulls will likely stage a recovery buy-wall around the $5 region.

On-chain Data Suggests Holders Could Soon End the Sell-Off

Furthermore, on-chain data suggests that most $AXS holders could be unwilling to sell in the coming days due to unfavorable prices. According to the MVRV data, the current holders are now staring at double-digit losses if they continue selling.

As seen below, most investors that bought $AXS in the last 30 days will book nearly 10% losses if they sell today.

Will Axie Infinity ($AXS) Price Rebound? | MVRV ratio, August 2023. Source: Santiment

The Market Value to Realization ratio (MVRV) shows the net-financial position of investors who have recently bought an asset. Historical data trends show that $AXS holders have not assumed more than 15% losses since mid-June

Hence, with the current holders already approaching 10% losses, this indicates that they will end the sell-off and wait till prices are more favorable.

In conclusion, while the bears still currently hold sway, $AXS bulls could soon take advantage of the low prices and oversold status to stage a rebound.

$AXS Price Prediction: Potential Rebound From $5

The Axie Infinity on-chain indicators outlined above show vital signs of an imminent $AXS price rebound.

The In/Out of Money (IOMAP) data shows the purchase price distribution of Axie Infinity holders within the 20% boundaries of the current market price. As seen below, it validates the prediction that $AXS Price could rebound from the $5 range.

Evidently, 819 holders had bought 40,560 $AXS tokens at an average price of $4.93. They could trigger an instant $AXS price rebound if they hold firm as predicted.

But, if that support level fails to hold, the next supply wall at $4.50 could help prevent a panic sell-off.

Axie Infinity ($AXS) Price Prediction | IOMAP data, August 2023 | Source: IntoTheBlock

Still, the bulls could firmly seize control if $AXS exceeds the $7 territory. However, as seen above, the cluster of 969 addresses had bought 20.7 million Axie Infinity tokens at the maximum price of $6.17. They could force a downswing if they mount a sell-wall at that territory.

But if that resistance level cannot hold, $AXS could head toward $7.