What risks do traders face?
While the cryptocurrency market remains fearful due to global volatility, AXE Infinity (AXS) has unexpectedly emerged as a bright spot. The AXS token rose above $2.4 and erased all losses from last year's October sell-off.
The real question is whether this rally can sustain itself. Multi-dimensional data gives investors a more objective view.
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What is the Axie Infinity (AXS) Rally to drive in January?
The latest data from BeInCrypto Price shows that AXS has gained more than 200% since the beginning of the year. Daily trading volume has exceeded one billion dollars.
The rally began after the project's founder in Axie Infinity announced plans to transition AXS rewards into an app-token version of AXS, known as bAXS. Players can use bAXS in Axie Core and get it to get more benefits.
Surprisingly, the XS rally did not end quickly. It was extended for another week despite a broad market correction during the same period.
Data from CoinGecko highlights another important driver. South Korean businessmen are playing an important role in financing. Their enthusiasm pushed AXS above the $2.4 level.
Of the more than $1 billion in daily trading volume, Upbit alone accounts for more than $320 million, or more than 32 percent. Prices on Upbit were trading at a premium compared to Binance and other exchanges. This suggests that South Korean traders are willing to pay higher prices, based on expectations of further upside.
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Additionally, a recent BeInCrypto report has shown renewed interest in GameFi projects. Investors are revisiting the past and turning capital into GameFi tokens that were once considered forgotten.
“Nostalgia is the most powerful emotion in the universe. There is no other IP in crypto that makes people miss the past and get excited about the future. – Jihoz.ron, co-founder of Axie Infinity, said.
Warning signs that could endanger the AXS Rally
Bucking the broader market trend, AXS's rally has raised doubts among some analysts. In crypto markets, intrinsic enthusiasm sometimes overcomes extrinsic fear.
However, behind the dramatic price hike lies the chain's marks. AXS balances have increased along with the price. This indicates that more tokens are being acquired, which may create selling pressure.
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The seven-day average deposit volume reached its highest level in three years, according to a recent BainCrip report. According to on-chain data, several large-scale wallets have recently transferred AXS to Binance.
As long as buying pressure remains strong, these flows can be absorbed quickly. Once demand weakens, the trend may reverse.
Another thing to consider is the lack of growth of new players on the Ronin Network, Axie Infinity's main platform.
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According to Ronin's Dune Analytics data, weekly new active addresses remain below 10,000. This figure has dropped significantly from 500,000 in 2024 and shows no clear signs of recovery.
The lack of meaningful user base expansion reflects saturation in the play-to-find model. This model once attracted millions of players during the pandemic. Without an influx of new users, AXS recovery may face structural challenges.
In addition, open interest in AXS futures contracts exceeded $ 130 million, which is the highest level in three years. This increase indicates higher speculative activity, which investors use to make bets on price movements.
Higher open interest usually indicates higher liquidity risk, especially in volatile market conditions. This environment increases the possibility of increased fluidity, which can significantly lower AXS values.
How long the AXS rally can last depends on whether positive stimuli can outweigh the warning signs described above. Trading today requires careful balancing of many factors to mitigate risk as the market faces unpredictable and high volatility.
