Axie Infinity [AXS] is close to a patterned breakout – Can shorting yield gains?

ambcrypto.com:

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

Axie Infinity’s [AXS] price action has weakened over the past few weeks. Since January 23, the gaming token has depreciated by 40%, with the crypto trading below $10. At the time of writing, AXS’s value was $8.3 and it could retest key support levels if macroeconomic headwinds persist. 

Read Axie Infinity’s [AXS] Price Prediction 2023-24

Source: AXS/USDT on TradingView

AXS has dropped from $12 to $8 as bears dominate the market. The prevailing inflation could further exert selling pressure and offer bears more leverage in the next few days/weeks. As a result, bears could sink AXS below the descending channel’s boundary of $8.40 and retest the $7.71 support. An extremely bearish scenario could see AXS drop to $6.65 or $5.70. 

Therefore, cautious bears could wait for a pullback to retest the lower channel’s boundary to confirm a further downtrend before making moves. 

A candlestick close above the channel’s lower boundary ($8.4) will invalidate the aforementioned bearish thesis. Such a move could offer bulls a recovery chance, especially if Bitcoin [BTC] defends the $22K psychological level. The target for bulls would be the channel’s upper boundary or the 38.2% Fib level ($10.2). However, bulls must clear the hurdles at 23.6% Fib level ($9.17) and 50-period MA ($9.95).

The RSI (Relative Strength Index) declined to the oversold territory, reinforcing bears’ leverage. In addition, the Average Directional Index (ADX) was above 25 and the slope turned north, confirming a strong downtrend. However, the increasing divergence between the ADX and price could also indicate a