Axie Infinity (AXS) price tumbled to a two-year bottom of $4.20 as investor interest in the GameFi sector dwindled in early September. On-chain indicators reveal that the AXS GameFi ecosystem is now flashing some green signals for an imminent comeback.
Gamers on the Axie Infinity ecosystem have profited hugely as the GameFi sector emerged as one of the unlikely winners from last week’s crypto market rally. Will they build on these historic price gains or hit the exit button early?
Axie Infinity Has Been Attracting a Flurry of Active Gamers Since Mid-October
Axie Infinity price has increased by an impressive 43% in the last 10 days, rising from $4.1 to $5.85 between October 19 and October 30.
A closer look at the underlying data trends during this period reveals that this upswing cannot merely be written down as a spillover effect from the broader crypto market rally.
On-chain indicators show that the Axie Infinity ecosystem had been attracting a consistent flow of active gamers weeks before last week’s price breakout.
In fact, the number of daily Active Addresses interacting on the Axie Infinity gaming network has been on the rise since mid-October.
As depicted in the CryptoQuant chart below, Axie Infinty registered on 173 Active Addresses on October 15. But since then, the number of active wallets has increased persistently, reaching a 100-day peak of 484 addresses on October 29.
Axie Infinity (AXS) Active User Addresses vs. Price | Source: CryptoQuant
The Active Addresses metric measures the daily user activity by tracking the number of unique wallets that conduct valid network transactions.
It is often a bullish signal when a blockchain network witnesses a prolonged increase in Active User Addresses, as observed above.
It simply shows that over the last two weeks, there has been persistent rise in the number of users deploying transactions and utilizing the products and services hosted on the Axie Infinity gaming network.
Unsurprisingly, the 180% growth in active users between October 15 and October 30 has already triggered a 43% AXS price recovery. Notably, the last time AXS attracted upto 484 active addresses was July 21, when price were well over $6.
This signifies that AXS current underlying network activity has the carrying capacity to scale the $6 price resistance.
Axie Infinity Gamer Profits Has Hit a 20-Month Peak
Like most GameFi and Play-2-Earn projects, Axie Infinity has a separate token, the Smooth Love Potion (SLP), used to commodify and trade in-game assets among gamers.
In further confirmation that GameFi is making a comback, the profits that have accrued to SLP tokens holders has exceeded AXS’ recent 43% price gains significantly.
Santiment’s Market Value to Realized Value (MVRV-30) ratio shows the net financial position of the holders who acquired SLP in the last 30-days.
It shows in the chart below that their unrealized profits have ballooned to 53%, which is the highest since February 2022.
Axie Infinity Smooth Love Potion (SLP) vs. Price | Source: Santiment
As the MVRV ratio of SLP rises, it implies that the current Axie Infinity gamers are opting to HODL their assets rather than cash in on their 53% profits.
They could be looking to deploy the tokens for more valuable utility in-game transactions or positioning to score higher profits in the near future. Either way, this could be bullish for the Axie Infinity price and the ecosystem as a whole.
In summary, the growth in SLP price and gamers profits is a vital indicator that the ongoing GameFi comeback is underpinned by an organic increase in gaming activity and profitability of trading in-game assets, rather than mere speculation on crypto market trends.
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AXS Price Prediction: All Hands on Deck for $10?
From an on-chain perspective, Axie Infinity’s current underlying network activity has the carrying capacity to retest the $7 price resistance. And considering how the Axie Infinity gamers have not booked their SLP profits early, AXS seems in prime position for another leg-up.
The Global In/Out of the Money (GIOM) data, which groups the current AXS holders by their entry prices also confirms this outlook. It shows that, the $7 area poses the largest restiance to the ongoing AXS price rally.
As depicted below, 10,500 addresses had bought 127.9 million AXS at the minimum price of $6.98. If they begin to sell as the AXS rally approached $7, it could cause an instant pull-back.
But if the gamers continue to HODL, AXS prices could hit $10 for the first time since March 2023.
Axie Infinity (AXS) Price Prediction, GIOM data | Source: IntoTheBlock
On the downside, the GameFi comeback could be truncated in AXS price retraces below $4. But in that case, the bulls could mount a formidable buy-wall around $4.65, where 5,070 current holders had bought their 3.8 million AXS holdings.
However, failure to hold that support level could see Axie Infinity price retrace toward $4.
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