With Axie Infinity Losing Users, Here’s how AXS Could Perform

Key Insights:

• Axie Infinity’s active users have witnessed a decline since December 2021.
• The recent Ronin hack has added to AXS’s selling pressure.
• For now, AXS’s price is down 7% over the week. 

While most of the top cryptocurrencies have performed adequately well as Q3 came to an end, some projects such as Axie Infinity suffered due to external issues like the Ronin hack.

Notably, Axie’s daily users saw a decline that could have some long-term effects on the ecosystem, thereby pushing competitors like The Sandbox and Decentraland ahead. 

Axie Losing Momentum

Axie Infinity game had been losing users much before the infamous Ronin hack was disclosed last week, restricting the ability of players to move digital money out of the virtual world. 

Sky Mavis, the developer behind Axie Infinity and Ronin, highlighted that the number of daily active users (DAUs) on Axie has fallen 45% to 1.48 million from a peak in November. The latest tally is for the week ended March 28, or a day before the $600 million Ronin hack was discovered. 

The decrease in DAUs has been particularly noteworthy since December when updates to the game were announced. In the last week of March, when information about the Ronin hack surfaced, the hackers took off with Ether and USD Coin. 

Axie’s Ronin bridge is a sidechain built to facilitate faster and cheaper transactions for the game. Thankfully after the hack on Ronin, there were no significant price implications on AXS. 

AXS Price Action

At the time of writing, AXS traded at $64.58, noting a 1.29% decline in 24-hours and a 6.86% fall over the week. The depreciating number of users on Axie could be correlated with the over 50% fall in price the token saw from December 2021 to January 10. 

Nonetheless, the recent market recovery has put AXS above the crucial $60 mark. Furthermore, AXS’s trade volumes have maintained relatively higher levels since the last week of March. 

One worrying price trend spotted on AXS’s chart is its RSI making lower lows indicative of selling pressure taking over the coin’s market. In the short term, the $70.2 mark could act as a strong resistance, and a move above the same could ensure further gains for the token.