The price of Axie Infinity has recorded a retracement, but the most important question is why whales are buying right now. Since the breakout on January 21, the price of AXS has risen by about 41%, finding resistance near $3.00. The rise has been rapid and largely uninterrupted. However, warning signs are now emerging: the price has dropped by over 17% compared to yesterday, even though large holders are quietly increasing their exposure.
This creates a clear conflict. Whales are coming back into play, but several chart signals indicate that the risk of a short-term retracement is growing.
A bear harami signaled buyer exhaustion after the rally.
The first warning of the crash in the last 24 hours came from the daily candle structure of AXS. A 'bearish harami' pattern formed near the recent highs. A 'bearish harami' occurs when a small red candle develops within the body of a previous very strong green candle. This pattern signals that buyers are losing momentum and that sellers are beginning to react.
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This pattern is important because Axie Infinity has already shown this behavior in the past. On January 18, a similar 'bearish harami' pattern occurred after a strong upward push. In the following days, AXS corrected by nearly 26%. That movement was driven by buyers retreating, while sellers took advantage of higher prices to exit.
This means there could be a broader crash ahead, especially considering that AXS has already dropped 17% in the last 24 hours. After a 41% rally, this signals that bullish strength is no longer expanding. At least for now.
Whales are finally buying again, misplaced optimism?
On-chain data shows that something significant has changed. Whales of Axie Infinity had reduced their exposure during the early stages of the rally. This selling pressure was visible in Santiment data and coincided with the constant price increases. This confirms that AXS whales may have taken advantage of the price strength of Axie Infinity, which increased by 220% month over month, to offload positions that would otherwise have been at a loss.
This behavior has now changed.
Since January 22, whale wallets have increased their holdings from about 243.78 million AXS to about 243.94 million AXS. This amounts to an addition of about 160,000 tokens. At the current price, this purchase was worth about $430,000.
This suggests that whales were no longer taking advantage of the rallies to exit. On the contrary, they seem to have positioned themselves strongly and confidently on the coin.
At the moment, this adds a level of support, but does not eliminate the short-term risk caused by the bearish harami pattern that has already initiated the correction.
Exchange flow data confirms this mixed picture. On January 15, Axie Infinity recorded strong inflows to exchanges of about 4.07 million tokens, a clear signal of selling pressure. On January 18, the flows turned strongly negative, with about 465,000 tokens withdrawn from exchanges, reflecting strong buying demand.
On January 24, outflows from exchanges have reduced to about 112,000 tokens. This means that buyers are still dominant, but demand is weaker than before. Profit-taking has begun, while whales are still selectively adding. Are the whales making the right choice?
The MFI divergence and the price levels of AXS have been decisive.
Momentum indicators reinforce caution. The Money Flow Index, which measures buying and selling pressure using price and volume, was declining even as the price rose between January 17 and 23, at $2.71.
This shows that the dips were no longer being bought aggressively as they were at the beginning of the bullish run. The price of AXS started to decline, and the immediate minimum support below these levels pushed it even lower.
From a price standpoint, key levels came into play immediately. On the upside, Axie Infinity needed to reclaim and hold above $3.00 (a key psychological level that previously rejected the price), then surpass $3.11. A clear break above $3.11 could have reopened the path to $4.02.
But that did not happen.
On the downside, the level of $2.54 represented critical support. This level coincides with the Fibonacci retracement of 0.618 and has previously acted as a strong reaction zone. AXS lost $2.54, and the corrective phase began.
The retracement could now deepen to $2.20 and even $1.98, trapping the whales even more in the process.
Whales are buying, but momentum is decreasing. Buyers remain in charge, but they are no longer aggressive.
If Axie Infinity recovers above $2.54 and momentum rebuilds, the rally can continue. Otherwise, the market may need a deeper correction before the next bullish leg.
