The rise of blockchain gaming and the Metaverse has quietly pumped not only the Metaverse tokens, but the larger narrative as well. In fact, the same was highlighted in a previous article as well. While the growing popularity of blockchain gaming tokens is noteworthy, Axie Infinity’s gains make other tokens’ rise look less so.
However, over the past week, Axie has more or less seen sideways movement after hitting an ATH of $ 165.
Axie wave over or do more gains await?
AXS, after charting close to 320% gains over the last three months, was trading at $156.73 at the time of writing. While there isn’t much to fear on the price front, the price movement looked less dramatic, with Axie recording only daily gains of 3.83%.
The altcoin, after recording a high yearly ROI of close to 110761%, has been moving sideways since 29 October. In fact, Axie’s relative strength index also seemed overheated, at the time of writing, as Axie’s price struggled ahead of the $ 156 mark.
So, could the cooling down of the gaming and metaverse mania be behind AXS’s lost momentum?
Earnings always in the picture
While Axie may not have seen monumental gains in the past week, Axie has infused gains into other tokens. For instance, Axie Infinity recently announced the launch of its decentralized exchange, Katana. This sparked a rally in the Smooth Love Potion (SLP) reward token. SLP saw more than 100% gains over the past two days as it finally made its comeback after the price drop in September 2021.
According to Colin Wu, soon after the release, Katana DEX launched on Axie’s Ethereum sidechain Ronin and hit $163.23 million as its transaction volume rose to $150 million on 5 November. So other than the Ethereum-based Ronin, what was Axie’s favor?
Supply dynamics
Notably, Axie’s supply on exchanges (as % of total supply) was at its lowest while exchange outflows spiked over the last week. This behavior seemed to highlight the conviction of the AXS HODLers to hold on.
Further, AXS could’ve also pumped because of its volatility i.e. the annualized standard deviation of daily returns over a window of time that has been dropping.
Additionally, Axie’s Sharpe Ratio has maintained a decent number, making Axie a comparatively safer asset to hold. Nonetheless, with Axie’s MVRV 7-day and 30-day looking heated, AXS may see some short-term pullback. This can present a good buying opportunity around the $130-140 level.
