- The AXS token rallies as the Axie Infinity blockchain witnesses strong address activity ahead this month.
- Retail investors should maintain caution as a total of 4.8 million AXS tokens, are likely to be freed up.
Blockchain-based Play-to-Earn giant Axie Infinity saw its native token AXS rally significantly in a few days and has been the talk of the town. On Sunday, January 22, the Axie Infinity (AXS) token jumped by a staggering 42 percent hitting its four-month high close to $14.
As of press time, AXS is trading at $12.19 with a market cap of $1.2 billion. Axie Infinity is a blockchain-based trading and battling game partially owned by the users on the platform. In the digital currency ecosystem, Axis Infinity is the most successful play-2-earn (P2E) game as of date.
Amid the broader crypto market slowdown last year in 2022, the play-to-earn gaming ecosystem also took a significant hit and a drop in user engagement. However, since the beginning of 2023, the address activity on the Axie Infinity blockchain is once again picking up steam. As per the data on DappRadar, the leading P2E gaming platform Axie Infinity witnessed a 59 percent surge in user activity since the beginning of 2023.
Additionally, the sale volume on the platform surged by 214 percent while the daily transaction count has surged by more than 100 percent since January 1. The latest price rally in AXS comes as the number of daily active wallets trading this crypto jumped significantly. But after peaking on January 14, the active addresses are once again on the downside.
Along with Axie Infinity, on-chain data provider Santiment, reported that another crypto dubbed SmoothLovePotion witnessed a similar surge in its address activity.
♾🧪 #AxieInfinity & #SmoothLovePotion have come back to earth after address activity slowed down last week. However, another rally can start for these two again if network growth begins picking up steam . Read our community post on $AXS & $SLP. https://t.co/4viV3Y52Kc pic.twitter.com/VsHJgfo5vG
— Santiment (@santimentfeed) January 23, 2023
Beware of AXS token rally
While Axie Infinity’s native token AXS has rallied quite a bit, investors need to be watchful with the upcoming events. According to the data source TokenUnlocks, a total of 4.8 million AXS tokens, representing 1.8 percent of the total AXS supply, shall be freed up later on Monday.
Such token unlocks usually hint at a bearish activity as massive supply floods the market causing investors to book profits. Felix Hartmann, the managing partner at crypto investment firm Hartmann Capital, believes that the recent market rally is due to the fact that the community believes that the Axie team shall announce a positive catalyst in order to counteract the bearish impact of the token unlock.
Speaking to CoinDesk, Hartmann said:
Subscribe to our daily newsletter!
No spam, no lies, only insights. You can unsubscribe at any time.
Over the last 12 months crypto teams have started building a track record for saving big announcements for unlock days. It’s happened so consistently that people now expect a bullish catalyst around unlocks.
AXS is one of those tokens that gaining ahead of unlocks over the expectations of a bullish catalyst ahead. Hartmann says that this new trend of releasing good news along with token unlocks is unethical. “I view this new trend as fairly unethical as you are creating a buzz to help your investors unload on retail [investors]who are unaware of things like unlocks,” he added.