Popular metaverse coin Axie Infinity (AXS) suddenly took off vertically. The altcoin, which Turkish crypto investors are also interested in, experienced a sharp increase, rising by more than 20 percent.
The popular altcoin witnessed a sharp rise!
As prices rose rapidly, AXS formed a large daily green candlestick with a long upward wick. AXS gained nearly 22%, rising from $4.22 to $5.15 in one hour. The altcoin has given back some of the gains, at the time of writing. However, AXS was still trading at $4.76, up 11.29% over the previous 24 hours.
On September 11, AXS fell to the lowest levels last seen in June 2021. During this period, it dropped to $4,059. When the daily RSI value broke below 30 and reached 21, AXS triggered a reversal, confirming oversold conditions. The gaming token consolidated with the initiated recovery. After that, it rose for two consecutive days. The rally accelerated with a sharp rise to highs of $5.15 during yesterday’s trading session.
What’s behind the rise?
When we look at AXS’s official account, there is no major announcement or upgrade that would require a price increase. Therefore, the exact reason for the rise in altcoin price is not yet clear. However, as it stands, the rise is technically supported, according to analysts. Additionally, the most likely explanation for the price increase is an unexpected short squeeze. This means a rapid increase in price due to excessive short selling rather than underlying fundamentals.
This can be understood from the fact that the surprise move led to a significant amount of short liquidation. Axie Infinity worth $1.41 million was liquidated in the last four hours of the sharp rise. Most of this, $798,420, was made up of short positions. The sudden price movement also triggered a massive surge in trading volumes as traders jumped into the market to capture gains. During this period, 24-hour AXS trading volume increased by 343% to over $100 million.
Axie Infinity users are falling
Axie Infinity is one of the largest players in the Blockchain gaming industry in the world. Developers have created a platform where people can play games and then earn rewards through the Smooth Love Potion (SLP) coin. At its peak, the altcoin had hundreds of thousands of users playing for both fun and money. But recently, the platform has lost thousands of users as the demand for these games has decreased.
DappRadar’s data shows that the number of Unique Active Wallets (UAW) on Axie Infinity has dropped more than 10% in the last 30 days to 76.6k. The volume of funds coming into its smart contract dropped by 34% to $22.36 million. As a result, the remaining balance on the network hovers over $550 million. Axie Infinity’s user metrics are much higher than those of other popular metaverse platforms such as Decentraland and Sandbox. These platforms have fewer than 4,000 unique users each month.
It is unclear why the Axie Infinity price jumped. One possible reason is that crypto is jumping in sync with other digital currencies. Bitcoin rose above $26,700 while Ethereum rose to $1,635. cryptokoin.comAs you follow from , in total, the entire crypto market cap has reached over $1.06 trillion. In most cases, altcoins like Axie Infiny tend to rise when Bitcoin is doing well. Another possible reason is that the UAW has increased by 77% to 24.3 thousand in the last 24 hours. Transactions in the same period increased by 84% to 49 thousand.
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