Cryptocurrencies targeting the metaverse ecosystem are not having the strength to withstand the selling pressure that has been hitting the entire crypto asset market and could fall by more than 20%, with two of the largest metaverse tokens being Axie Infinity (AXS) and The Sandbox (SAND) leading the decline.
So believe analysts Jonathan Morgan and Akash Girimath, both from FXStreet, who point out in a recent analysis that the charts do not look favorable for metaverse tokens.
According to Morgan, in the case of AXS, the crypto asset is stagnant against the daily Tenkan-Sen, generating a new lower high and putting Axie heading for another low.
“Axie Infinity price had a nice 22% bounce from Monday’s lows, but sellers entered the Tenkan-Sen and thus prevented AXS from moving above the Tenkan-Sen. As a result, there are more warning signs bears on the oscillators,” he said.
He notes that the Relative Strength Index (RSI) remains in bearish market conditions, with the first oversold level at 30 and the second oversold level at 20. Additionally, he highlights that there is bearish divergence between the candlestick chart and the Composite Index. . The Composite Index printed higher highs, but the candlestick chart printed lower highs.
AXS/USDT Ichimoku Kinko Hyo daily chart
“The combination of the rejection against the Tenkan-Sen and the hidden bearish divergence with the Composite Index provides significant weight for a short-term bearish bias. Sellers can push Axie Infinity price into a support zone shared between the extension of the 100% Fibonacci at $60 and volume checkpoint at $67,” he said.
Furthermore, according to him, if the bulls want to negate any downside move they will first have to push for a close slightly above the Tenkan-Sen at $80. Then a close above the Kijun-Sen, currently at $90.
“The ideal setup for Axie Infinity to exhibit a clear and undeniable uptrend is a close above the cloud with Chikou Span in open space. The earliest this can happen is at $127, a not insignificant move that would have to happen.” “, he concludes.
Girimath, for his part, highlights that the price of the SAND is noticing a slight slowdown after its recent upward trend
“The sandbox price has risen 20%, creating a demand zone, ranging from $4.21 to $4.77. Investors can expect the SAND to pull back after this rise and in some cases the setback may put the aforementioned demand area to the test again,” he said.
He notes that a four-hour candle closing below $4.21 will create a lower low, invalidating the bullish thesis for SAND. This move could pave the way for the sand box price to drop and retest the $4.08 support level, where the buyers could attempt another comeback.
“If selling pressure remains bullish, SAND could go back to the $3.88 position,” he said.
However, he also notes that the token could reverse the trend and start another rally if it breaks the resistance at $5.52, which is up 15% from $4.77.
“With this, it is likely that the price of SAND will extend beyond this level and mark the psychological level of 6 dollars. In total, this increase would represent a gain of 25% and it is likely that SAND will form a local top”, he concludes. .
SAND/USDT 4-hour chart