Axie Infinity: This Chart Pattern Calls for More Consolidation
Axie Infinity's (AXS) price action has been largely sideways but moving in an overall downward trend. The critical aspect of this consolidation pattern is that they have been followed by a breakout to the downside.
Consolidation – Breakout Pattern
Eventually, a breakout will occur whenever a cryptocurrency displays a consolidation pattern. Axie Infinity doesn't follow a random consolidation – breakout pattern. The daily chart revealed that AXS's price follows the same "staircase" effect that occurred during the 2021 bullish cycle.
During the 2021 bullish cycle, we had the stair-step pattern developing within an upward trajectory; right now, the same pattern forms along with a downward trend.
It's no coincidence that each consolidation phase it's replicated on the right side of the chart right near where, on the left side of the chart, we had the breakout to the upside. This can give us an idea of where the next consolidation phase might happen.
Additionally, we can measure the volatility inside this consolidation phases and estimate how big the next consolidation phase might be. As we move to the downside, the price volatility is between 25% and 78%.
This means that the bottom of the next consolidation phase can be anywhere between $25 and $10, from which hopefully we can see a breakout to the upside and the start of a new bullish cycle.