The price of Axie Infinity's native token AXS surged on Wednesday despite a lackluster upwards momentum elsewhere in the cryptocurrency market.

The AXS/USD pair rose to as much as $44.96 following a 16.44% intraday jump. Nonetheless, the strong upside move came every bit a office of a sideways trend that saw AXS fluctuating within the $36.48-$56.57 cost range, hinting that traders placed speculative upside bets on the token.

AXS trades nigh its all-time high. Source: TradingView.com

Axie ecosystem swells

Axie Infinity'south growth every bit a gaming project provided bullish cues to speculators. Data provided by Axie World showed that Axie Infinity earned $196.89M in July 2022. Meanwhile, so far in August, the projection has raked in circa $45M in revenue, with well-nigh ane one thousand thousand active users.

"The coaction between Axie'southward revenues and AXS price is noticeable," wrote Jeremy Ong and Jayden Andrew, analysts at crypto-focused research firm Delphi Digital.

"This makes sense given the majority of revenues come from Axie breeding fees paid in AXS to the treasury, which significantly decreases the circulating supply of AXS — causing a supply-side clasp."
Axie Infinity acquirement per month. Source: Axie World

In item, Axie Infinity is a play-to-earn metaverse powered by the Ethereum blockchain. The gaming project enables players to breed, raise, and merchandise digital pets called Axies. That makes Axie Infinity a blockchain-powered version of the pop Pokemon game.

Meanwhile, AXS acts as a default currency of the Axie Infinity ecosystem that players employ to purchase and sell Axies and pay trading fees. AXS also operates as a governance token, allowing Axie Infinity players to vote on proposed upgrades.

AXS holders as well receive a 95% of the full Axie Infinity revenue.

The economic prospects have and so far additional AXS need amid traders. Data intelligence firm IntoTheBlock noted that the number of Axie Infinity token holders grew by 400% since Nov 2022—from zero to sixteen.73K addresses.

Only 1% of the addresses holding AXS accept fabricated losses. Source: IntoTheBlock

Currently, more than 93% of wallets holding AXS are in a state of profit.

Technical setup

As stated, the AXS/USD exchange rate looks rangebound between two levels, with $56.57 acting as interim resistance and $36.48 as a temporary support. As a outcome, traders increased their upside bets on a rebound from $56.57 and become similarly bearish when the toll hits $36.48.

Improver support for AXS comes in the course of its 20-solar day exponential moving average (20-day EMA; the green wave in the chart below) near $35.x.

Axie Infinity'southward AXS holds to a higher place a potent support confluence. Source: TradingView.com

Equally of late, AXS corrects lower specifically after its daily relative forcefulness index breaks above 70—an overbought area. Therefore, buying the AXS top, particularly when the surface area in a higher place remains unchartered territory for the token, carries additional downside risks.

Related: Axie Infinity refreshes tape loftier as AXS ascends 131% in but 3 days

Still, if AXS/USD breaks to a higher place the $5.67-resistance level, its adjacent profit target appears to sit near $76.65. Conversely, breaking below the support confluence about $36 risks crashing the pair to the next line of defense force at $24.07, a drop of 33%.

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