Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Since losing $91, Axie Infinity (AXS) has fallen rapidly while forming a bearish trendline resistance (white, dashed). In doing so, it pierced essential price points.
A reversal of the 20 EMA (red) would confirm a hidden bullish divergence, one that would prepare AXS for a test of the $53 mark. The trendline resistance is an important area of value to determine the future trajectory of the crypto.
At the time of writing, AXS was trading at $51.52.
AXS 4 Hour Chart
The retracement phase saw multiple down channels (white) on the 4-hour chart as the alt lost nearly 74.4% of its value (since its ATH), hitting its six-month low on Feb. 24.
During its fall, the crypto shot through vital support levels (now resistance) while maintaining the $42.1 mark. As a result, AXS has since experienced a gradual recovery. The latest rally marked an up channel (white), one that hit a barrier at the two-month trendline resistance.
Now, a sustained close above the 200 EMA (green) would support the alt for a test of its trendline resistance. After this, it could see a pullback to its 20 EMA before continuing its bullish rally. In recent days, AXS has faced a strong rejection of lower prices as buyers look to take advantage of the improved sentiment.
As a result, the gap between the 20 EMA and 200 EMA has narrowed as the bulls continue to increase their strength.
After hitting the overbought mark, the RSI has seen a steep decline in the past 24 hours. Now that it is watching a test of its direct trendline support, any close above this support would confirm a hidden bullish divergence with the price. The bulls must therefore defend this level to allow for a short-term recovery.
The MACD displayed a bullish edge as the lines swung above the zero line. A possible bearish crossover could lead to a setback for bulls in the near term.
Given the recent buying pressure and the rejection of lower prices, AXS is looking to test the USD 52 before a possible pullback. Any close above the trendline resistance could lead to a trend-changing rally. By the way, the alt shares a 68% 30-day correlation with Bitcoin. So keeping an eye on Bitcoin’s movement is essential to make a profitable move.