Axie Infinity Price Forecast: AXS Rally Meets High Futures Interest and Heavy Trading Volume

Axie Infinity (AXS) began the week with a 25% rally, reflecting strong demand for the gaming token. The rise followed the completion of the bonded AXS (bAXS) token airdrop on Thursday, which had been overshadowed by broader market movements. Recent on-chain activity has seen an increase in active addresses and trading volume, indicating renewed retail interest in the token.

Futures data also reveals a surge in open interest, with AXS futures Open Interest rising by roughly 55% to $99.54 million in a 24-hour period. This increase suggests growing capital inflows as traders anticipate further price gains. Short liquidations of $711,540 outpaced long liquidations of $327,920, indicating that bearish positions are being wiped out at a faster rate.

On-chain analytics point to increased user demand, with daily active addresses rising to 410 on Monday from 321 on Sunday. The trading volume for AXS also jumped to over 181 million on Monday, up from 36.67 million the previous day, reinforcing the likelihood of extended gains.

Why Did This Happen?

The bAXS airdrop aims to reduce the immediate sale of ecosystem or gameplay rewards by distributing them in a bonded format. This structure ensures that tokens remain within the Axie Infinity ecosystem and are not immediately liquidated, potentially supporting the token's value. The bonded tokens are non-transferable and incur a variable fee, which is paid by sellers to the treasury. This mechanism helps maintain value circulation within the ecosystem and could be a factor in the recent price rebound.

How Did Markets React?

Market participants have reacted to the bullish momentum with increased trading activity. The surge in derivatives trading and open interest suggests a shift in sentiment, with more traders taking long positions. Santiment data also indicates a rise in user participation, reinforcing the idea that the rally may be more than a short-term spike.

The price action has seen AXS hold above $1.50 as of Monday, securing nearly 25% gains after a sharp decline of over 50% since January 28. However, the token remains below the 50-day and 200-day Exponential Moving Averages (EMAs), which are often used as technical indicators of trend strength. Analysts suggest that if AXS can clear the 50-day EMA at $1.55, it could extend gains toward the 200-day EMA at $1.79.

What Are Analysts Watching Next?

Technical indicators show some improvement in bearish momentum. The Moving Average Convergence Divergence (MACD) has stalled after crossing below the zero line on Friday, while the negative histogram bars are contracting. This suggests that the downward momentum may be weakening. The Relative Strength Index (RSI) stands at 47, edging higher toward the neutral zone as selling pressure wanes. According to analysis, despite this, analysts remain cautious. If the 50-day EMA fails to break, AXS could lose the 50% Fibonacci retracement at $1.42, measured from the May 14 high of $3.70 to the October 10 low of $0.550. The continued presence of bearish pressure indicates that the rally could still face resistance. Traders will be watching closely for a breakout or breakdown to determine the next major price direction.