The metaverse frenzy at the end of 2021 led to massive gains, but it also suffered in the bear market. Recent data indicates a serious problem for the altcoin that was shaken by a multimillion-dollar attack at the end of last year. What do the latest on-chain readings and price predictions suggest?
Axie Infinity (AXS)
The Ethereum sidechain Ronin, created to empower the play-to-earn game Axie Infinity, has experienced significant growth in total value locked (TVL) in recent months. Despite not focusing on DeFi, the Ronin network has reached approximately $80 million TVL in the past two months, according to a Twitter user. This figure surpasses the TVL power of several popular layer1 networks such as APTOS (APT), Near, Algorand, Tezos, and Stacks.
Data from DefiLlama shows significant growth in the TVL of the sidechain since the beginning of the year. As of January 1st, Ronin’s TVL was $44.86 million. Today, it stands at $74.6 million, indicating a 66% growth in the seven-month period. While the TVL has been on an upward trend since the beginning of the year, it is noteworthy that it has decreased by 78% since the hack of Ronin Bridge on March 23, 2022. Since its reopening on June 28 of the same year, the TVL has increased by 35%.
Although Ronin’s TVL has increased in recent months, an evaluation of the network’s activity on-chain during the same period reveals a sharp decline in network activity. Data from Nansen indicates a significant decrease in the number of daily active addresses on Ronin since March 23. The daily active user count, which peaked at 186,403 active addresses on that day, has since dropped by 92%.
Should You Buy AXS?
The game’s popularity has significantly declined due to the challenging bear market. There have been significant drops in daily average transactions in 2023. On the other hand, the continuously increasing circulating supply, coupled with weak demand, creates an environment where price declines could continue. As one of the pioneers in the play-to-earn space, the project experienced high demand two years ago. However, if it fails to find a way to increase its active user count, things could become even more complex for Axie Infinity.
From a price perspective, the $6.2 support level is currently holding. However, 4-hour candlestick closures below this level could push the price down to $5.9 and $5.63. If these levels cannot be maintained, $5.4 is a possible bottom. On the other hand, a close above $6.46 is needed for a bullish scenario. At the time of writing, the popular play-to-earn token is finding buyers at $6.3.
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