After rebounding from its June lows, Axie Infinity (AXS) was unable to establish a bullish structure. Therefore, a breakdown could be around the corner.
Since June 18, the altcoin has been rising, breaking out from a descending resistance line two days later. The resistance line in question had been there since the end of March prior to the breakout.
However, the £15.8 resistance area twice rejected it and it did not begin a meaningful upward move. Given that the breakout failed to sustain, the presence of major weakness is suspected.
It is therefore likely that the price of AXS will drop below its lows from June due to the rejection.
Since its June lows, the asset has been trading within an ascending parallel channel on the daily chart. These channels frequently bring corrective movements, therefore the most likely outcome would be a breakdown from them.
Furthermore, the daily relative strength index (RSI) has fallen below 50, confirming the likelihood that the price will break down.
Therefore, a breakout from the channel is imminent based on both the technical indicators’ readings and the price action on the daily timeframe. The price could probably hit a new yearly low as a result.
Starting from its all-time high, it could be the fifth and final wave of a bearish impulse that AXS is having.
The existence of the previously discussed channel indicates that wave four of the price movement is underway.
In order to confirm that the fifth and final wave is in progress, there needs to be a breakdown from this channel.
The £8.11 price point represents the first potential target for the movement’s bottom. When measuring the latest bounce, the 1.27 external Fib retracement level gives the aforementioned target.