- Axie Infinity’s token, AXS, which rewards game players, has faced challenges over the past year and a half.
- Despite being one of the most prominent gaming tokens, AXS has been on a downtrend. This downward trend suggests that traders may consider selling when the token encounters resistance levels.
- According to CoinMarketCap, AXS is trading at $4.50, a significant drop from its peak value of $165.37 in November 2021.
Axie Infinity is a game in the Metaverse. People can acquire non-fungible tokens (NFTs) symbolizing monsters and pit them against one another to win the game’s native token, AXS.
What is Axie Infinity?
Axie Infinity is a popular play-to-earn blockchain game created by the Vietnamese company Sky Mavis. In this game, players collect and battle virtual creatures called Axies, represented as individual NFTs (non-fungible tokens).
The game allows players to earn rewards in the form of two native tokens: Axie Infinity Shards (AXS) and Small Love Potion (SLP).
AXS is the more valuable of the two tokens and serves as an ERC-20 governance token for the Axie Universe. Holders of AXS can stake their tokens, play the game, and participate in governance votes to claim rewards.
Players can earn AXS by playing various games within the Axie Infinity Universe and through user-generated content initiatives.
The concept of play-to-earn (P2E) games like Axie Infinity gained prominence in the crypto space in 2021.
These games allow players to use their in-game NFTs to participate in battles and challenges, with the opportunity to earn both NFTs and traditional cryptocurrency tokens, potentially making a profit.
However, it’s important to note that the initial reports about people supplementing their incomes by playing Axie Infinity in the Philippines may have needed to be more accurate.
Some of these reports were generated by individuals or firms with vested interests in promoting play-to-earn games, and there were questions about the credibility of the sources cited.
Additionally, Axie Infinity faced a significant security incident in April 2022 when hackers exploited vulnerabilities in its blockchain network, Ronin, resulting in the theft of over $600 Million worth of cryptocurrency.
Axie Infinity Price History
Understanding the historical performance of AXS can provide valuable context for price predictions and analysis.
Here’s ACS’s price history:
- AXS was initially introduced to the market in November 2020 at around $0.18.
- It experienced significant growth during the early 2021 crypto boom, reaching a high of $10.85 in April.
- Despite some dips during the summer, AXS reached an all-time high of $160.36 later in the year, driven by growing interest in play-to-earn, the Metaverse, and NFTs. It closed the year at $93.30.
- However, 2022 was a challenging year for AXS. It peaked at $97.78 in January but faced declines, reaching a low of $11.92 in June, primarily due to the Ronin hack and market crashes.
- A recovery occurred, but turmoil in the FTX exchange led to a drop to $5.84 in November.
- AXS briefly rebounded to $9.54 in December but subsequently declined to around $6.95 by December 19, 2022.
- AXS tokens had a total supply of 270 million, with roughly 99.6 million in circulation. With a market cap of over $690 Million, it is currently the 53rd largest cryptocurrency.
Reasons Why Someone Might Want to Short AXS
Here are some common reasons why someone might consider shorting AXS:
They believe AXS’s current market price is too high compared to its actual value or fundamentals.
This could be due to excessive hype, speculative trading, or a perceived mismatch between the token’s price and utility within the Axie Infinity system.
- Market Crash Expectation
They anticipate a broader cryptocurrency market downturn. Suppose they expect a bearish phase in the crypto market due to regulatory changes, macroeconomic events, or a loss of investor confidence. In that case, they may short AXS as a defensive strategy to protect their portfolio from potential losses.
Before shorting any cryptocurrency, individuals should conduct thorough research, consider their risk tolerance, use risk management strategies, and, if possible, seek advice from financial professionals.
Shorting is a speculative trading strategy that should be approached with caution.