Axie Infinity (CRYPTO: AXS) has shot up 7,520.11% since the year began, outpacing Dogecoin’s (CRYPTO: DOGE) 3,497.24% year-to-date gains, but traders bearishness could affect its price action going forward.
What Happened: Data from cryptocurrency exchanges indicates that futures traders are taking short positions on AXS with a perpetual futures market for AXS witnessing negative funding rates, as per CoinDesk.
See Also: How To Buy Axie Infinity (AXS)
While a positive funding rate implies longs are playing shorts and the market is tilted towards the bulls, a negative rate on the other hand points to bearish trends.
CoinDesk reported that funding rates for AXS perpetuals on FTX and Binance — two major exchanges that offer such products — were negative. On Binance, the funding rate for the AXS/USDT perpetuals has been negative for 14 days.
Analysts said the difference in the exuberance shown by traders stems from the May market crash.
Ashwath Balakrishnan, associate at blockchain research firm Delphi Digital said, ”Honestly, everyone was in disbelief at the beginning of this month when AXS started pumping. A lot of traders thought it was just a random market movement,” Coindesk reported.
Why It Matters: Axie Infinity, the governance token of a blockchain-based game that allows users to collect tokenized creatures called “axies” has been soaring in popularity of late.
The project’s co-founder Jeffrey Jiho Zirlin claimed this month that the project generated more revenue than Metamask, Pancakeswap (CRYPTO: CAKE), MakerDao (CRYPTO: MKR), and Curve (CRYPTO: CRV) combined.
Cathie Wood-led Ark Invest’s analyst Frank Downing cited Axie Infinity as a strong indicator of NFT growth earlier in the month.
Axie Infinity players in Asian countries are enamored by the fact that they can earn a substantial income by just engaging in gameplay.
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Photo: Courtesy of Axie Infinity