AXS Rally Runs Out of Steam as Overbought Conditions Trigger Pullback
Axie Infinity’s AXS token has pulled back sharply after a strong multi-day rally, ending the latest session firmly lower as bullish momentum finally showed signs of exhaustion. The sequence of recent daily closes reveals a market that initially accelerated upward before losing steam and retracing into a dense cluster of nearby support levels. This shift aligns with momentum indicators that have begun to cool after reaching overheated conditions.
The short-term trend, represented by the 9-day EMA, continues to slope upward and sits well above the longer-term 20-day EMA. This positioning typically confirms a bullish bias, as it reflects a market still trading above its recent averages despite the latest pullback. However, the gap between the two averages has begun to narrow, suggesting that upside momentum is slowing and buyers may be losing control.
Daily chart for AXS/USDT (Source: TradingView)
Momentum indicators echo this cooling. The RSI recently surged into overbought territory but has since retreated, signalling that the earlier rally pushed too far, too fast. A retreat from extreme RSI conditions often precedes either a consolidation period or a deeper corrective move. Meanwhile, the MACD remains in positive territory with a bullish signal line crossover still intact, indicating that the broader trend has not flipped bearish. But the diminishing histogram shows weakening momentum—another sign that bulls may be running out of strength unless buyers return with conviction.
AXS price action now gravitates around a critical layer of support and resistance. The first key resistance sits at $2.338, followed by $2.436 and $2.503, levels that capped the price during its recent attempt to resume upward movement. On the downside, support at $2.321, $2.300, and 2.219 forms the structural buffer preventing a deeper retreat. The market is currently wedged between weakening bullish momentum and a congested resistance zone overhead, making the next decisive move likely to come from liquidity pressure rather than price drift.
The order book illustrates this dynamic clearly. A large ask wall at $2.598 represents the first major liquidity barrier; clearing it could open the path for an impressive 11% push toward higher resistance levels. Even more impactful are the ask walls at $2.900 and $3.000, where significant liquidity sits above the current price. Breaking those barriers would be a strong show of bullish force and could accelerate AXS upward by 24%–29% based on typical liquidity vacuum effects.
On the other side, bid walls paint a more cautious picture. Heavy buy-side liquidity at $2.210, $2.138, and $2.067 currently keeps the market from sliding into deeper losses. But if the wall at $2.210 breaks, the price could spill another 5% quickly.
Below that, losing $2.138 exposes an 8% decline, and a breakdown beneath $2.067 could usher in a far sharper 11% correction. These liquidity cliffs illustrate why the price stability in this zone is fragile despite supportive technicals.
Potential AXS Trade Setups
For long traders, the strongest opportunity emerges on a reclaim of the $2.436–$2.503 resistance band. A clear daily close above this range, especially supported by an uptick in MACD momentum, could confirm renewed bullish strength.
A breakout through the $2.598 ask wall would add conviction, with upside targets sitting near the $2.90–$3.00 liquidity pocket. Long positions lose appeal if the price closes below $2.300, as such a move would indicate a shift in trend momentum and expose the deeper liquidity gaps outlined in the order book.
For short traders, a rejection from the $2.338–$2.436 resistance band for AXS may present early downside opportunities—particularly if the RSI continues drifting lower and MACD momentum weakens further. The cleaner short positioning, however, opens only after a decisive breakdown beneath $2.210. Losing this key bid wall exposes multiple lower liquidity layers that could accelerate selling pressure dramatically.
Overall, AXS currently rests at an inflection point where the broader trend still leans bullish, but momentum has clearly softened. The price now depends heavily on how it reacts to both structural support and the substantial liquidity barriers defined in the order book. A breakout will likely trigger a swift directional move, especially with large liquidity gaps sitting both above and below the current range.
Disclaimer: The information presented in this article is for informational and educational purposes only. It does not constitute financial advice. Ecoinimist is not responsible for any losses incurred. Readers should exercise caution before acting on this content.
