Axie Infinity price braces for volatility with $63 million worth of AXS due to flood markets a cliff unlock

Axie Infinity price has held steady above the $4.13 support level for almost two weeks, consolidating within a range.
AXS token could witness some volatility soon, with 15.13 million tokens worth $62.62 million due to flood markets on October 20.
Previous unlock on July 22 sent the token almost 10% below crucial support as token holders received staking rewards.

Lockridge Okoth FXStreet

Axie Infinity (AXS) price has been trading within a range for the past couple of weeks, withstanding the worst of a market devoid of volatility. However, this could change soon, with the gaming token’s cliff unlock event around the corner.

Also Read: Axie Infinity price inching closer to fresh 2023 lows could leave over 94% of investors at a loss

Axie Infinity price could break support soon

Axie Infinity (AXS) price has spent the last ten days struggling to hold thin above the immediate support at $4.13, with momentum indicators signaling bearish. Based on the technical outlook, this support floor could break soon, catalyzed by a bearish event on the gaming token’s calendar.

In the current state, the Relative Strength Index (RSI) is below the 50 level, suggesting the momentum is rather weak. Its deviation to the south shows that buyer power continues to dwindle. The position of the Awesome Oscillator (AO) histogram bars in the negative territory also adds to the gloom. With this, Axie Infinity price could lose immediate support, potentially falling to the range low of $4.06.

AXS/USDT 1-day chart

On the other hand, if sidelined investors come in, Axie Infinity price could activate its upside potential, breaking past the range high of $4.37. A decisive daily candlestick close above this level would bring the $5.00 psychological level in sight.

Axie Infinity token unlocks

As part of the bearish catalysts, the Axie Infinity ecosystem has a cliff token unlock event barely a day out. The event, slated for October 20, will see up to 15.13 million AXS token flood the market, adding to its circulating supply. Based on current rates, these tokens are worth approximately $62.62 million.

The tokens will be allocated to the team, advisors, ecosystem fund, play-to-earn, and towards the ecosystem’s staking rewards, akin to the previous unlocks event on July 22. If history repeats, the token could record increased volatility, potentially dropping in value before a possible recovery.

Staking rewards entails incentives given to token holders for staking their AXS tokens. By staking, token holders support the validation and security of transactions on proof-of-stake (PoS) blockchains. With more tokens adding to the circulating supply, the price could fall, with a possible recovery around the corner as investors look to acquire AXS for staking purposes to merit for the rewards.

With some of the tokens also going towards the project’s play-to-earn scheme, community membership is required for participation, hence increased buying pressure on AXS.