Axie Infinity gains 40% as activity surges: But AXS bears refuse to back down

Axie Infinity [AXS] climbed sharply by 40% to $1.57, while trading volume surged 285.95% to $72.8M, reflecting a strong influx of capital into Axie Infinity. 

This expansion followed a prolonged period of reduced activity, where price had remained compressed near the $1.05 support zone. The sudden spike in volume confirmed that buyers had stepped in aggressively rather than gradually. 

As a result, the rally carried stronger conviction compared to previous minor rebounds. 

However, such rapid volume growth often reflects short-term participation bursts, which means sustained demand above $70M volume would be required to maintain upward pressure on AXS.

AXS tests range highs

AXS rebounded from the $1.05 support zone and advanced toward the $1.60 resistance, with the price reaching around $1.57 during the recent push. 

This move confirmed strong buyer reaction at the lower boundary of the established $1.05–$1.60 range, where accumulation had previously taken place. 

The rally from near $1.20 into the upper range reflected increasing buying strength, especially as price approached a level that had historically triggered rejection. 

At the same time, RSI surged to 78.68 from around 49.87, signaling a sharp shift into overbought conditions as buyers dominated recent sessions. 

This alignment between price expansion and RSI strength indicated aggressive upside pressure, although stretched conditions suggested limited room for immediate continuation. 

If price breaks above $1.60, the structure would likely shift toward a bullish continuation phase. However, failure at this level would likely reinforce the range and trigger a pullback toward mid-range support. 

Leverage builds as Open Interest jumps

Open Interest rose 107.30% to $94.50M, up from lower levels, confirming that new leveraged positions had entered the market. This increase aligned with the price move from $1.20 to $1.57, showing that derivatives traders had actively participated in the rally. 

The sharp rise in OI indicated growing conviction among traders expecting further price movement. However, such a steep increase also introduced risk, because heavily leveraged positions tend to amplify volatility. 

If price continues toward $1.60, these positions will likely support the move. On the other hand, a reversal could trigger liquidations, accelerating downside pressure rapidly. 

Why are shorts still in control?

Despite the price increase, the OI-Weighted Funding Rate remained negative at -0.1938%, indicating that short traders had been paying to maintain their positions. 

This showed that a significant portion of the market had bet against the rally even as AXS climbed. The divergence between rising prices and negative funding highlighted skepticism among derivatives traders. 

However, this imbalance also creates potential for a short squeeze. If AXS breaks above $1.60, short positions would likely face liquidation pressure, which could push the price higher. 

Alternatively, if resistance holds, the existing short bias would likely strengthen, reinforcing downside pressure. 

Final Summary 

• AXS surged with strong volume, but resistance near $1.60 remains a key barrier.
• Rising leverage and bearish positioning suggest volatility could increase around this critical level.