Key Takeaways
A surge in trading volume for popular altcoins on South Korean exchanges on Sunday contributed to the 10% rally in Axie Infinity’s price. However, at the time of writing, it appeared unlikely that this rally would continue.
Axie Infinity [AXS] saw a tremendous spike in daily trading volume on Sunday, 31 August. This was explained by the surge in trading volume for many popular altcoins, including the likes of Ethereum [ETH] and XRP, on South Korean exchanges like Upbit and Bithumb.
In fact, AXS saw $423 million in daily trading volume on 31 August. This was an almost 15x increase on the average trading volume of around $30 million the previous week.
Volume surge not enough for AXS to establish an uptrend
Source: AXS/USDT on TradingView
Since April, Axie Infinity has traded within a range that has extended from $2.1 to $3.42. Marked in purple, the mid-point of this range was at $2.76. During Sunday’s price surge, AXS gained by 10% to close the day’s trading at $2.52.
Earlier in the day, the rally climbed to as high as $2.8, but the bears forced the buyers to retreat from the mid-range resistance. This was a sign that Axie Infinity would now trend towards the $2.1 support zone in the coming days.
The A/D indicator has slumped over the past few days too, reflecting seller dominance. Despite the flurry of buying on Sunday, the A/D indicator’s course did not shift bullishly.
The Awesome Oscillator made a bullish crossover above the zero line, underlining a momentum shift. Traders should be wary of this signal. The $2.51, $2.65, and $2.77 resistance levels appeared to be the local obstacles for AXS at press time.
A rally beyond these hurdles would require bullish conviction and steady buying pressure. Thanks to the market-wide bearishness, an AXS rally might be difficult in the coming days.
Source: Coinglass
Finally, the 1-month liquidation heatmap highlighted that the $2.4 area was a short-term liquidity cluster that could halt the bearish momentum. However, it was sparsely populated, compared to the magnetic zone at $2.1-$2.2.
The range formation and the liquidation heatmap revealed that buying AXS in this demand zone would be viable.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
