The Downfall of Axie Infinity and How AXS Continues to Suffer Deeper Price Losses

Although the Axie Infinity continues to face major setbacks, the technical setup of AXS forecasts a sharp 2500% continuum in its price. After hitting a peak of $172 back last November, the current value of Axie Infinity is down by 90%. In fact, the sharp corrections continue to work against AXS. In terms of performance, data shows that Axie Infinity has managed to hit the bottom top-tier cryptocurrencies.

However, market experts believe that the worse has yet to come for Axie Infinity. It looks like the cryptocurrency may further decrease in value in the next few months. Technical data also indicates that the performance parameters around Axie Infinity are no longer effective and robust.

Low AXS Demand Due to Decreased Player Count

As of now, remember that 90% of the drawdown is already in place, but Axie Infinity is still at risk of bearing more significant price losses. Historically, AXS worked as a settlement token as part of the gaming ecosystem of Axie Infinity. This, in turn, made it possible for players to buy native NFTs. These native non-fungible tokens revolved around Axies, flurry digital pets.

At the same time, AXS also used to work as a dedicated token for players so that they can spend more and breed a new line of Axies altogether. Technically, when new users become part of the Axie Infinity platform, they need Axies to fight against other lines of Axies. After a win, the Axie Infinity ecosystem rewards players with Smooth Love Potion or SLP, which serves as a native token.

Axie Infinity Ecosystem

Players can win big tournament grants to get additional AXS. Ultimately, old players on Axie Infinity now depend on new players to increase or maintain the demand for Axies. And when new players are unable to do that – old players decide to sell their Smooth Love Potion native tokens along with AXS earnings in crypto marketplaces.

Consequently, this triggers a downward trajectory for AXS and puts more pressure on the market rates.  After the native token of Axie Infinity started to drop in value, the game was no longer attractive to new players. Besides, no player wants to buy AXS and earn low-valued AXS and SLP units.

The fact of the matter is that ecosystem of Axie Infinity has been through several stages. If the player count continues to drop, you can expect to see an 85% decline by the end of the year. In fact, data predicts that the drop in player count can go from 8,950 to 63,240 in six months.

Ronin Chain

It is also important to understand that the in-platform volume of Axie Infinity, which is measured by evaluating its Ronin chain, is down to $2.12 million from $300 million. Simultaneously, the top executives of the platform have changed their position to “play-and-earn” from “play-to-earn”. This new branding of the platform further proves that the game is no longer performing and appealing to players.

Role of Rising Inflation

It is true – rising inflation has had a negative impact on some of the best cryptocurrencies in the market. But amidst rising inflation, the bearish outlook of Axie Infinity has increased. In May 2022, the annual CPI or consumer price index increased by 8.6% as opposed to 8.3% in April.

This further increased the fear among investors concerning the hiked interest rates by the Federal Reserve. After the publication of a CPI report, AXS dropped by 7.5% in value. The low cash liquidity followed by stringent policies from Federal Reserve would also trigger more losses for AXS tokens.


  • Mia Patel

    Gaming innovator with a zest for exploring the potential of blockchain in fostering community-driven platforms.

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