Axie Infinity shorters MUST keep this in mind before selling
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
After hitting its ATH on 6 November, Axie Infinity (AXS) commenced its downturn in a descending channel (white) while the bears kept testing the crucial $46-support.
As AXS enters a low volatile phase, the chances of a volatile move in the days to come will be much higher. Any close below the $45-support would trigger a shorting signal while confirming the descending triangle.
Should the support hold good, the alt could continue its squeeze phase for a while before it conforms to the long-term trend. At press time, AXS was trading at $46.598.
Source: TradingView, AXS/USD
The retracement phase marked two down channels (white) on its daily chart as the alt lost nearly 74.4% of its value (Since its ATH) and touched its six-month low on 24 February. As a result, AXS struggled to sway above its Point of Control (POC, red).
Throughout its descent, the alt kept snapping through vital Fibonacci support levels while upholding the 78.6%-level. As a result, AXS flashed a descending triangle on its daily chart over the last ten weeks. While the sellers revealed their advantage, the gap between the 20-50-200 EMA has significantly widened.
Now, the immediate support is vital for the bulls to defend to prevent a major fallout. Any bullish comebacks in the near term would continue to find resistance at the POC and the upper trendline of the triangle.
Source: TradingView, AXS/USD
If the RSI obliges to its trendline support, it would confirm a bullish divergence. In such a case, AXS would gain some thrust to test its immediate resistance. Also, the OBV followed a similar trajectory and insisted on not
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