Can underlying demand push AXS to the top of the price chart?

2021 was an extraordinary year for Axie Infinity (AXS). On January 1st, this game token was valued at just $ 0.50. By December, the price had increased more than 250 times.

The first days of the month have been pretty hot for AXS so far. For example, it hit a new high of $ 94.67 on September 4th and hit $ 155.27 on October 4th. Additionally, its price hit a new ATH at $ 166.09 on November 6th.

December is very different, however. AXS established 7 consecutive red candles in the first week, reducing the value by 30%. However, the token recovered moderately after 2 days. At press time, AXS is trading 15% above its December 6th low.

The source: Trade view

Will the upward trend continue?

Maybe not. Because the correlation of AXS with Bitcoin has risen sharply since the beginning of November and is around 1 at the time of the analysis.

On the other hand, King of Crypto has not been doing well lately. BTC is trading below $ 50,000 at the time of writing and is less likely to bounce off as much right now.

During November, when other gaming tokens like SAND, MANA and ENJ consistently hit multiple highs, AXS threw itself out of the running. Instead, it runs on Bitcoin. So, given the camaraderie of the two cryptocurrencies over the past month, it’s unlikely that AXS ‘uptrend will last long until BTC recovers.

Correlation with BTC | The source: IntoTheBlock

Oddly enough, other indicators also support the above story. The proportion of active addresses from AXS has decreased significantly in the last few months. In the first days of October the index was still at 0.6%, it is now only around 0.06%.

Active address rate | The source: IntoTheBlock

A reduction in the number of active addresses inevitably leads to a reduction in the number of token transactions. This shows that the community is less and less interested in this token.

Number of transactions | The source: IntoTheBlock

Also, the daily income of a typical Axie Infinity player will decrease over time. Currently, most of the demand for this token is coming from gamers as the play-to-earn model encourages people to buy more in order to earn more.

Interesting one tweets from the beginning of November have made their sales decline since August clear. In fact, that would have unfortunate consequences for the AXS price.

Source: Twitter

Basics don’t fluctuate

In the midst of the turbulence, the log revenue of Axie Infinity is quite high compared to other logs. In fact, only Ethereum has generated more revenue than Axie Infinity in the past week, which shows the protocol’s strong fundamentals.

The source: Token terminal

In fact, the number of HODLers is AXS get a raise Month after month from 2.02k to 2.36k. Overall, this also paints an optimistic picture in the medium to long term.

Conclude

The games industry today is bigger than the film and music industries combined.

This industry offers a lot of development potential for the future. As Axie Infinity has already made a name for itself in this area, it is expected to grow strongly. Thereafter, the new underlying demand improved and the AXS price benefited directly over the long term.

The source: Statista

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