• Axie Infinity’s AXS token has seen a 42% rise in the last 24 hours, despite an imminent token unlock of 4.89 million tokens.
• The token unlock could lead to a potential selling pressure on the asset.
• Market analysts have advised trading cautiously ahead of the unlock.
Axie Infinity’s digital asset AXS token has seen an impressive price action, rising 42% over the last 24 hours, according to CryptoSlate data. This positive price performance has occurred ahead of an imminent token unlock, which is set to release 4.89 million new tokens – 1.8% of the asset’s total supply – worth roughly $63.8 million, according to Token Unlocks.
Although the token unlock could provide an opportunity for investors, it could also lead to a potential selling pressure on the asset. This has caused some market analysts to advise their community to trade cautiously, while some have argued that the unlock provides a short opportunity. The managing partner at Hartmann Capital, Felix Hartmann, commented, “Historically teams have saved up announcements for unlocks. I think market has become so reflexive that people buy in anticipation of unlock news. Funding rate is at around +0.03% meaning starting to see an imbalance with more longs than shorts.”
While the token unlock could be a cause for concern, the average player count for Axie Infinity has dropped to a new low, according to Active Player data. This could be an indication that the play-to-earn (P2E) token has seen its peak, or that the recent price performance is due to speculation.
Analysts have speculated that the recent price performance of the digital asset is due to the increasing popularity of non-fungible tokens (NFTs). NFTs have become one of the hottest trends in the cryptocurrency space, with many projects being released within the space.
It remains to be seen if the token unlock of AXS will cause the asset to cool off, or if the recent price performance was due to the increasing interest in NFTs. In any case, investors are advised to trade cautiously and monitor the market closely.