Axie Infinity (AXS), the popular metaverse coin project, is up over 40 percent in the last 24 hours. Thus, it reached the highest level of the last four months. So, what are the latest developments in the AXS ecosystem?
40% increase in Metaverse coin project
The AXS cryptocurrency from popular play-to-earn (P2E) project Axie Infinity is recovering despite the news that millions of dollars worth of tokens will soon be unlocked. According to the data, AXS has gained more than 40 percent in the last 24 hours, reaching a four-month high of $13.94. Locked in the number of open contracts on AXS-linked perpetual futures, the dollar value rose 156 percent in the last 24 hours to $104 million, according to Coinalyze. An increase in open interest alongside a price rally signals a new influx of money on the bullish side.
Axie Infinity is a Blockchain-based trading and war game that allows players to collect, breed, upgrade, battle and trade token-based creatures known as “Axie” and digitized as NFTs. cryptocoin.com As we have also reported, Axie Infinity Shards or AXS is a governance token of the Axie Infinity game. According to the data, approximately 4.8 million AXS tokens ($64 million at a current price of $13.31), equivalent to 1.8 percent of the cryptocurrency’s total supply of 270 million, will hit the market in the evening today. So 4.8 million tokens will be unlocked.
Why does unlocking tokens raise the price?
Unlocks are considered bearish catalysts that release liquidity and open doors for investors to lock in their profits. Tokens are locked to prevent large coin holders from selling their coins all at once, causing price drops. According to Flex Hartmann, managing partner at crypto investment firm Hartmann Capital, the confusing rally stems from hopes that the Axie team will announce a positive catalyst for the token lock to reverse the bearish trend. Hartmann used the following statements:
In the last 12 months, crypto teams have started saving big announcements for unlock days. This has happened so much that people are now expecting an uplift catalyst at unlock time.
AXS is one of the few cryptocurrencies to gain ground ahead of token lock. The cryptocurrency of decentralized exchange dYdX is up 64 percent this month, outpacing the market leaders despite the upcoming unlock on Feb. Aptos (APT), on the other hand, has doubled since the unlocking on January 12, reaching $13. “The market has become so reflexive that people are buying in anticipation of unlock news,” Hartmann said, adding that it is unethical to publish the new trend with good news along with the token unlock.
The unlocking process has been discussed for some time.
Some observers have long argued that the impact of unlocks highlights the prevailing market trend. Chris Burniske, co-founder of New York-based crypto-focused startup Placeholder, tweeted in April 2021:
Token unlocks are a complex phenomenon related to market psychology. Simply put, major unlocks can be a bullish catalyst for the bulls and a bearish catalyst for the bears. They unlock liquidity to continue the prevailing trend.
Thus, Burniske had announced the unlock trends in 2021. At the time, a bull frenzy swept the market, with Bitcoin hitting new record highs almost every two weeks. AXS has gained over 100% this month, breaking above the 200-day simple moving average for the first time since 2020.
The bull revival has yet to rekindle interest in the gaming platform. Data from the game statistics website ActivePlayer shows that Axie has had 432,001 live players in the last 30 days; this is the lowest level since October 2020.
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