Axie Infinity price faces risk of extending downtrend as holders dump AXS at losses

• Axie Infinity has seen a 58% increase in active addresses since April 6, signalling that user activity on AXS is on the rise.
• AXS holders realized nearly $165.6 million in losses since April 6.
• Increased activity combined with consistent selling pressure could result in a steep price correction towards November lows at $5.17.

Axie Infinity (AXS) rises nearly 2% on Monday despite holders realizing losses in the gaming token after its price touched the lowest level since mid-November on Saturday. While AXS investors are shedding their holdings at a loss, there has been a surge in active addresses and network growth, two key on-chain metrics that paint a picture of recovery. 

However, a recent increase in the token’s supply on exchanges threatens AXS's recent recovery as it could signal more downside ahead. 

Axie Infinity holders take losses amidst rising address activity

Data from crypto intelligence tracker Santiment shows that between April 6 and 15: 

• Active addresses climbed by 58%, signaling rising user activity. 
• AXS holders realized $165.6 million in losses, with the Network Realized Profit/Loss ratio dipping into negative territory.
• AXS supply on exchanges declined nearly 10%, although there has been a recent increase in the past day.

Based on the above metrics, AXS price could experience a steep correction if supply on exchanges rises and AXS holders continue realizing losses.

In the past day, AXS’s supply on exchanges has climbed by 110,000 tokens. Considering that many traders have recently opted to sell at a loss, market participants need to watch this metric closely as a further increase in supply on exchanges would signal a subsequent rise in selling pressure across exchanges. 

Network Realized Profit/Loss in Axie Infinity 

AXS price is currently holding near $7.33, above the five-month low at $6.10 registered on Saturday and gaining nearly 2% on Monday. 

AXS Active Addresses 

Typically, realization of losses by holders alongside a price drop is consistent with capitulation. However, in the case of AXS, the negative spikes on the NPL metric are not as significant as observed in December, when capitulation occurred. 

In December, the NPL metric measured over $11 million in losses realized by AXS holders in a single day, on December 12. Similarly, over $3 million in losses was realized in a single day on December 15. Large negative spikes in NPL in a single day amounted to capitulation and the gaming token’s price experienced a rally shortly after. 

Network Realized Profit/Loss

If AXS price decline continues, the gaming token could revisit its November lows at $5.17. On Saturday, AXS price hit its lowest level since November at $6.10.

Axie Infinity introduces a Daily Bounty Board

Axie Infinity launched on Monday an ecosystem-wide questing platform called the Daily Bounty Board, according to an official tweet on X. 

According to the announcement, users who complete daily bounties will be able to accumulate points and qualify for rewards. The gaming protocol labels it as a “weekly-play-to-airdrop.”

AXS has made a comeback to $7.46 at the time of writing.