Axie Infinity (AXS) Whales Buy Into a Pullback Risk After a 41% Rally

Axie Infinity’s native token AXS surged more than 41% from mid-January to mid-February 2026, recovering from losses accumulated since late September 2025. The rally pushed the price near $2.54, a level that now appears to mark resistance after a sharp rejection. Despite the upward move, on-chain and technical data point to weakening momentum and rising pullback risk.

Large investors, or 'whales,' initially reduced their AXS holdings during the earlier rally, selling about 11.2 million tokens or 4.4% of their supply between January 13 and January 21. Whale activity shifted in late January, with positions increasing slightly, indicating a renewed interest in the token. However, this re-entry into the market does not necessarily offset the short-term technical risks.

Price action and technical indicators suggest a bearish divergence, as the Relative Strength Index (RSI) declined while prices made higher highs. This pattern historically signaled weakening upside momentum and increased the likelihood of a near-term correction. The RSI crossed above 70, entering overbought territory, which historically precedes short-term tops.

Why the Move Happened

The AXS price surged from around $0.95 to $2.39 between January 13 and January 21, a gain of roughly 151%. During the same period, whale holdings decreased significantly, with the 1-year to 2-year cohort falling from 13.73% of the supply to 4.16%. This indicated that long-term holders were using the rally to reduce their exposure.

The bearish divergence in the RSI and the long upper wick on the candlestick at $2.54 suggest that the price faced active selling pressure at that level. This rejection implies that $2.54 acts as a real supply zone. Traders now watch for confirmation as to whether prices can hold above this level.

How Markets Responded

Exchange netflows turned negative in late January, with spot traders selling about $91,000 worth of AXS in the past 24 hours. This marked a shift from the steady buying observed earlier in the rally. Spot traders typically offer structural support, so their retreat indicates a potential weakening in the market structure.

Volume declined by 21% to around $2 billion in the last 24 hours, exceeding a $400 million drop. Low volume during a price rally often signals weakening momentum. Such conditions have historically preceded consolidation or corrective price moves.

Derivatives market data showed a mixed picture. While the Taker Buy/Sell Ratio indicated continued bullish sentiment in the futures market, the OI-Weighted Funding Rate turned decisively negative. This meant that short positions outweighed longs. A continuation of negative funding rates could increase downside pressure.

What Analysts Are Watching

Key support levels are now in focus, with $2.17–$2.20 acting as the first critical support cluster. If prices fall below this level, the next structural support is expected to be around $1.62–$1.64. A break below $1.63 could signal that the breakout structure is failing.

On the upside, bulls need a clean daily close above $2.54 to reopen the path toward $2.72 and potentially $3.01. Until that happens, upside moves may face resistance and could result in further corrections.

Whale accumulation in late January has added some short-term support, but it does not eliminate the risk posed by the bearish harami candlestick pattern. This pattern, which appeared near recent highs, has historically preceded corrections of at least 20%. The current 17% drop in the past 24 hours aligns with this historical pattern.

Investors are now watching for signs of renewed buying momentum. If prices stabilize and RSI aligns with price action, the uptrend could resume. A deeper correction would allow for a more balanced market structure but may also trap short-term buyers and whales who entered near recent highs.

Market participants should closely monitor the behavior of spot traders and whale activity in the coming weeks. A continuation of the current trend could see AXS stabilize at a lower level, while a breakout above $2.54 could indicate renewed bullish sentiment.