Axie Infinity (AXS) Price Drops 8% as Token Unlock Sell-Off Begins

Axie Infinity (AXS) Price Drops 8% as Token Unlock Sell-Off Begins

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## The Axie Infinity (AXS) Sell-Off and Price Prediction

Axie Infinity (AXS) has seen a sharp 8% drop in price, hitting the $6 mark on Tuesday only 48 hours after the latest token unlock event. With the Axie Infinity sell-off in full swing, the question remains, where will AXS price find support? In this article, we look into the causes of the sell-off, why long-term holders are selling, and possible outcomes of the price action.

Firstly, the token unlock event which occurred two days ago increased the circulating supply by another 3.6 million tokens, inflating the supply by $20.6 million. As expected, this has triggered a network-wide sell-off. On-chain data indicates that long-term holders, who hold 63% of the supply, have started to sell off. This is evident from the 250% spike in Age Consumed values between July 20 and July 25, from 1.54 million to 5.43 million.

The expected staking rewards-based token unlock has now been completed, leading to lesser pecuniary incentive for holders to HODL. As such, long-term investors are likely to intensify the Axie Infinity sell-off in the coming days.

Notably, on-chain data shows that Axie Infinity’s new-user acquisition rate is in a downtrend. With the newly injected tokens gradually making their way into the exchanges, this demand dearth might exacerbate the sell-offs’ impact.

Looking ahead, the drop in price could push prices to retest $5.0. The bears must first scale the critical support level at $5.20, which has 2,180 investors that had bought 378 million AXS tokens at the average price of $5.18. If the bulls muster enough strength, they could attempt to flip the $7 resistance, rallying towards $8.50.

In conclusion, the Axie Infinity sell-off is still in full swing, with long-term holders and dwindling new-user acquisitions leading to a decreased demand for the token. Although long-term holders and buyers could mount a buy-wall to counter the sell-off, the likelihood of another downswing towards $5.0 is high

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