The popular play-to-earn token Axie Infinity (AXS) dropped heavily after a magnificent rally of close to $30 during the last trading day. The asset reached a three-week high but eventually failed to hold the gains and corrected by more than 18.5% since the early trading hours. Moreover, it is currently posing more possibility of a larger downside incoming very soon.
The AXS price plunge is said to be fueled by the BTC price drop from around $32,200 to the current consolidation zone of around $31,500. In a larger time frame, the asset is appearing to be pretty bullish as it just has broken the falling wedge and raised a little high.
The price recently broke out from the falling wedge which is a notable bullish pattern and hence is subjected to a retest. The retest may drag the price towards the same support levels before resuming with a significant upswing ahead. The short-term price action also showcases a similar upward trajectory with supporting indicators.
As seen in the above chart, the price after a significant correction has just flipped from the lows and appears to be preparing for a ‘V-shape’ recovery. The RSI is displaying a bullish divergence, while MACD may flash a buy signal any time from now. Therefore, the upward trajectory may remain intact unless the price regains the lost levels. With a breakout, the Axie Infinity (AXS) price may range towards the immediate target of above $30 initially.