Although the first cryptocurrency has been around for about 14 years, blockchain gaming was not introduced until 2017. Crypto gaming is a niche with potential for explosive growth as the global gaming market is expected to reach about $314.40 billion by 2026.
Axie Infinity is a leading crypto gaming platform in 2023. This gaming universe was launched in 2018 by Vietnamese gaming studio Sky Mavis. Aleksander Larsen and Trung Thanh Nguyen are co-founders of this revolutionary universe.
Axie Infinity is a blockchain-based play-to-earn gaming platform inspired by the Pokemon game series. Players can earn the platform's native token, which can be used to purchase other resources such as land or upgrade their Axies. The platform also provides features that allow users to contribute to the universe. The major activities include trading, collecting, and collecting Axies and building virtual kingdoms to promote the ecosystem.
What is AXS, and why does it have value?
AXS - Axie Infinity Shards is a governance token designed for the Axie Infinity game universe. This governance token was introduced in 2020 and plays a central role in the universe's economy.
AXS has value because it is useful for various activities in the Axie infinity universe. Some of AXS's utility includes:
i. Participating in governance voting and the future direction of Axie Infinity
Imagine being able to vote on changes in your favorite crypto-gaming universe. AXS is a governance token allowing holders (players) to participate in the governance of Axie Infinity. Therefore, AXS holders can vote on important issues that influence the future of the universe. These issues may include voting on new features, partnership, scholarship rules, and more. When you hold AXS, you have become an integral part of the ecosystem, as your voice is heard during critical decision-making.
ii. Staking and earning staking rewards
Another use case of AXS is that it offers an opportunity for holders to stake the token. Players can stake AXS to earn a share of fees and profits generated by Axie Infinity. Staking APR varies over time based on AXS staked and platform performance. When more holders stake their AXS tokens, it contributes to the stability of the ecosystem. The staking annual percentage rate may vary depending on the market performance. Therefore, staking AXS may be a passive way for players to earn passive income over time.
Another significant use of AXS tokens is to complete payment when buying "axies" for the games. In addition, the token may be used by players to upgrade their "axies" to improve their chances of advancing in the game leadership boards.
What Gives AXS Value?
The cost of each AXS is $6.83. Axie Infinity tokens (AXS) rank 57 among all the thousands of crypto assets based on a market capitalization of about $785.79 million. So, where does AXS get its value from?
AXS derives its value from the following:
a. Governance rights
One of the significant areas in which AXS derives its value is the provision of governance rights- the ability to have a say in Axie Infinity's future and guide decision-making. Holders are a part of the government of the ecosystem. Therefore, they can vote on crucial matters that may affect the future of Axie Infinity Universe. As a result, holders feel a sense of involvement in the platform's growth, making the token valuable.
b. Staking rewards
Staking rewards is another aspect that contributes to the value of AXS. Holders can stake their tokens and earn a passive income over time. The staking APR provides a return on holding AXS but the APR may vary depending on various factors. Since holders can earn a part of the profit generated on Axie Infinity Universe, AXS becomes even more valuable.
Speculation is another factor that plays a role in increasing the value of AXS. This involves traders buying AXS in anticipation of price appreciation. Factors that drive speculations include increasing platform adoption, partnerships, new game modes, higher staking rewards, and overall market trends. In addition, market sentiment and the growth of online communities can affect the demand for AXS. Therefore, when more investors take an interest in AXS, the demand increases, as well as the value of the token.
AXS has a limited supply of 270,000,000, which is a factor that gives it value. However, there are only 116,956,144 AXS coins in circulation. The developers have implemented strategies like token burn to control the supply of AXS. Therefore, the scarcity of AXS combined with the growth of the platform may contribute to its value.
Axie Infinity Universe is not only popular for crypto gaming but making a profit. Due to the volatile nature of the AXS token, it is imperative to know how and when to trade AXS. Here, we will explore when it is best to go long, short, and critical trading strategies to maximize profit and minimize risk.
1. Buy/go long AXS
Here are some factors to consider before deciding to buy or go long with AXS tokens:
Staking rewards or APR increase substantially
One of the incentives to buy or hold AXS is an opportunity to earn profits from staking. Alternatively, when the annual percentage rate (APR) increases substantially, it boosts investors' confidence to go long to earn larger passive incomes. As a result, there could be an increase in demand for AXS tokens, which can lead to an uptrend in its market value.
New platform partnerships, features, or other announcements
Positive news like new features, partnerships, or upgrades can incentivize buying or holding AXS tokens. In addition, these factors promote the adoption and use of the token, which can generate positive market sentiments. Therefore, when positive events are announced, it could stir speculation regarding the growth and future of Axie Infinity Universe. As a result, investors will be attracted to buy AXS tokens because they anticipate an increase in their future price.
AXS underperforms the overall crypto market rise
The crypto market involves the rise and fall of assets' values. Therefore, in a market situation where AXS underperforms, the market value drops. This may be an excellent time to buy some AXS tokens in anticipation of a rise as demand increases. Investors should consider buying AXS at this low value so that they can profit as market sentiments shift and the price increases.
2. Sell/go short AXS
Here are some factors to consider before deciding to go short or sell AXS tokens:
Staking rewards or APR decline markedly
When staking rewards or APR steadily declines, it may indicate a loss of interest in Axie Infinity Universe. As a result, a drastic reduction in demand can cause the AXS market value to plummet. Therefore, traders most concerned about earning passive income may consider selling or going short before it is too late.
Highly anticipated upgrades or announcements
Sometimes, highly anticipated announcements do not generate the intended positive impact on the Axie Universe. If the market sentiment towards any announcement is unfavorable, it may lead to disappointment speculation. How investors perceive news or event plays a significant role in the market movement of any crypto asset. Therefore, this may cause investors to lose confidence in the potential of AXS to generate wealth in the future. As a result, they begin to speculate a price downtrend, which leads to massive selling or shorting on AXS tokens.
AXS significantly outperforms the broader crypto market rise
In some market conditions, the price of AXS may surge and outperform the overall crypto market. This is usually a sign that the token has been overbought, which often leads to a price correction toward a lower average. Expert traders can infer that the price has become inflated, which may be an excellent time to sell or go short in anticipation of price correction.
Take profits after a strong price move up
Another factor that can motivate traders to sell or go short is when AXS experiences a strong price uptrend. Investors often anticipate a fall in price after the price has reached certain levels. Therefore, they sell their AXS tokens for maximum profit and wait until the price has crashed before buying at lower prices. This is one way to exploit the token's volatile nature while minimizing risks.
How to Trade AXS
Are you a gamer who wants to earn passive income? Trading AXS is an exciting opportunity to have the best of both worlds. In addition, trading AXS has gained lots of attention due to its impressive performance. This section will explore how to trade AXS and make profits despite volatility issues.
Major cryptocurrency exchanges
You can trade AXS on major cryptocurrency exchanges like Binance, KuCoin, Gate.io, and others. They offer AXS trading pairs, including USDT, BTC, ETH, and other assets. However, the first step to trading on these exchanges is to sign-up and create an account on the platform. The next step is to verify the account by providing necessary documents like a driver's license, ID card, and face verification- the whole process may several minutes. Afterward, you can fund the account via debit card, credit card, or bank transfers to start buying tokens.
Now that your account is ready, you can choose any available trading pair to begin your AXS trading journey. However, it is essential to conduct research and stay updated on news and announcements that may significantly affect AXS price. In addition, you can employ fundamental analysis tools to identify good entry and exit market positions.
Online brokers for CFD and margin trading
Another way to trade AXS is through an online broker that provides access to crypto CFDs and margin trading. As a result, you can go long or short on AXS's potential profit using leverage.
Trading AXS CFDs (Contracts for Difference) allows you to speculate on the price movement of the token without actually owning it. On the other hand, margin trading involves amplifying your trading position with borrowed funds from your broker. However, traders must be cautious when using leverage because it can amplify gains and losses.
Choosing an online broker is another significant aspect to consider before trading. We advise traders to conduct extensive research and compare fees, features, and the reputation of platforms before choosing the one best for them.
If you are looking for a reputable and reliable CFD trading platform, VSTAR is the place for you. This platform is unique for two reasons - Firstly, you get institutional-level trading experience, including the lowest trading cost, which means tight spread and lightning-fast execution. Secondly, VSTAR is regulated by the CySEC, which means you get competitive prices, and your funds are secure. In addition, you can practice on the demo account available on the platform before investing your capital.
Technical Analysis Tools
For active traders and speculators, technical analysis plays a critical role in trading AXS. These tools provide useful insights into the price direction, trend strength, and trend speed of AXS tokens. Therefore, technical analysis tools are valuable in helping traders make informed trading decisions.
Here are technical analysis tools to help you identify potential entry and exit points:
- Support/resistance indicators
Support and resistance indicators are essential technical analysis tools. Support indicators identify price levels where a downtrend can be expected to reverse due to increasing demand. When the price of an asset is low, many investors are eager to buy the "dip". As a result, demand for the asset increases forming a support level.
Resistance levels indicate that the asset has been oversold, meaning the price uptrend is expected to reverse. Therefore, the resistance indicator can predict a downtrend in the market value of AXS.
- Trend Following
Trend following, in simple terms, means making trading decisions based on the ongoing trend. Based on the current market performance and value, you can decide to go short or long on AXS. For example, if the price of AXS rises, you can go long in anticipation that the uptrend will continue.
However, it is critical to implement stop-loss or take profit orders to protect your trades from the impact of market volatility. Factors that influence trends include news, events, and market sentiments. Therefore, sentiment analysis is crucial in trend following.
- Relative strength indicator (RSI)
The relative strength indicator (RSI) is a momentum indicator that can analyze AXS price trends to help you decide whether to buy, sell, or hold the token. The RSI identifies the market condition of AXS tokens - overbought or oversold, which may indicate that a trend reversal is imminent.
This indicator has values from 0 to 100, but you can consider AXS as oversold when the indicator is below 30. However, AXS tokens have been overbought when the indicator is above 70.
- Moving averages
The moving average is a technical indicator that can help traders identify trend direction. In addition, it can help traders determine AXS support and resistance levels. The moving average is a popular indicator that smoothes out price action by filtering out short-term fluctuations. Furthermore, they utilize past price trends to ascertain market trends.
- Chart patterns
Another essential technical analysis tool is charts. Charts can help traders identify price trends, patterns, and possible direction. Trading AXS involves taking advantage of its volatile nature. Therefore, chart analysis can influence your decision to enter or exit a position.
Another significance of chart analysis is that you can monitor increases in trading volume, which usually accompanies higher volatility.
AXS crypto derives value from governance rights, staking rewards, and speculation, which drive demand for the token. Traders should consider staking reward changes, new platform announcements, market sentiments, and technical analysis to identify buy and sell signals. In addition, it is critical to analyze how new variables may affect future price speculation.
Actively trading AXS through crypto exchanges or CFD brokers allows experienced traders to generate profits from rising and falling market trends. However, high volatility also brings risks of losses. Therefore, traders must implement technical tools to manage risks accordingly. Finally, the importance of trading on a reputable platform like VSTAR must be considered.