The price of Axie Infinity's native token, AXS, is at a critical juncture following a massive 41% rally that began on January 21, pushing the token near the $3.00 resistance level. However, the rally has stalled, with the price down over 17% in the last 24 hours, sparking concerns of a significant correction despite on-chain data showing renewed buying interest from large holders, or 'whales'. This creates a conflicting market picture where whale accumulation clashes with bearish technical signals.
Technical analysis reveals clear warning signs. A bearish harami candlestick pattern formed near recent highs, signaling buyer fatigue and a potential reversal. This pattern previously preceded a 26% correction in mid-January. Momentum indicators like the Money Flow Index (MFI) also showed a bearish divergence, trending lower even as prices climbed, indicating weakening buying pressure during dips. Key support at the $2.54 level, aligned with the 0.618 Fibonacci retracement, has been lost, opening the door for a deeper pullback toward $2.20 and potentially $1.98.
On-chain data presents a more complex narrative. After reducing their holdings during the initial rally, whale wallets began accumulating AXS again starting January 22, adding approximately 160,000 tokens worth around $430,000. Exchange flow data also showed a shift from heavy inflows (selling pressure) to consistent outflows (buying demand), though this demand has weakened recently. This suggests whales are positioning for longer-term strength, but their buying may not be sufficient to counteract the immediate technical breakdown.
The weekly chart shows a mixed long-term outlook. While weekly trading volume has hit record highs not seen since 2024 and the Relative Strength Index (RSI) has crossed above 50 for the first time in over a year, the price failed to decisively break the crucial weekly swing high of $2.92 from July 2024. Analysts suggest that without a weekly close above the $2.92-$3.00 resistance zone, a retracement is likely. The primary downside targets for this correction are identified in the $1.878 to $1.238 range, representing a potential 30%+ drop from recent highs.
