Axie Infinity price recovery delayed despite investor deposits hitting a five-month high

Axie Infinity price, following the broader market cues, is trending downwards for the moment as the bearishness in the market has grown considerably. Incited with the regulatory crackdown by the Securities and Exchange Commission (SEC), the investors have resorted to offloading their holdings for now.

Axie Infinity price nears key support level

Axie Inifity price trading at $6.25 is nearing December 2022 lows of $5.85, a level that has been tested only once in the last six months. The relentless crashes of this year have contributed considerably to the price fall, including the 13% crash in the past three days.

AXS/USD 1-day chart

This has led to the investors now setting a selling mindset which is visible in the on-chain performance of the cryptocurrency. Between May 18 and at the time of writing, more than $7.5 million worth of AXS has been sold back to exchanges since recovery, or the chances of one have not been observed yet.

Axie Infinity supply on exchanges

This selling is also backed by the fact that investors’ deposits spiked to a five-month high. Historically, spikes on this metric have only been observed at peak prices thatmark the market top. Usually, this is proceeded by selling and correction. But this time around, the spike is not the result of a market top but just selling since the price is at a six-month low right now.

Axie Infinity active deposits

Therefore, this is an indication of the excessive bearishness, pessimism and fear of losses in the investors, which is also noted by the sudden jump in their participation. Active investors akin to active deposits observed a spike over the last week, wherein their numbers grew from 199 to 419, marking a 110% increase.

Axie Infinity active addresses

Thus if AXS holders can bear such an impact on the Axie Ininifty price, it is bound to potentially decline and fall through the support level of December 2022 lows at $5.85. However, if the same investors stop selling, they could potentially pull the price back up toward the barrier at $7.25, which also coincides with the 50-day Exponential Moving Average (EMA).