Axie Infinity’s token rallied roughly 180% in recent weeks, but chart patterns and on-chain flows suggested the move functioned more as a distribution phase than a sustained recovery. Traders and analysts noted technical rejection and concentrated selling by large holders between January 13 and January 21.
Price action registered a breakout from a bullish flag, pushing toward a high near $2.54, only to print a pronounced upper wick on the daily candle — a clear rejection at that level. The run higher between January 17 and January 21 printed higher highs in price while the Relative Strength Index formed lower highs, a classic bearish RSI divergence that signaled fading buying momentum.
The market encountered a dense resistance band in the $2.287–$2.338 range, where upside attempts met substantial selling pressure. “Bearish RSI divergence is a potent technical signal,” according to data report, which flagged the divergence as part of the evidence that momentum had weakened despite rising prices.
That combination raised questions about whether the surge simply provided exits for whales and long-term holders rather than marking a return to durable demand.
On-chain data pointed to distribution, not accumulation
On-chain metrics between January 13 and January 21 showed large holders reducing exposure as the token climbed. Whale supply fell by about 11.2 million AXS — roughly 4.4% of their holdings — and long-term cohorts cut positions sharply. Net Unrealized Profit/Loss moved from a deep capitulation zone (around −3.4) toward roughly −0.5, creating a strong incentive for previously underwater holders to realize gains as prices recovered.
Taken together, the charts and on-chain flows aligned with a distribution narrative: long-term holders and whales capitalized on the rally while shorter-term participants increased exposure. Short-term cohorts (1–3 months) expanded their share markedly, a pattern often associated with momentum chasing and heightened vulnerability to reversal.
Investors are now turning attention to the $2.287–$2.338 resistance zone, which will serve as the test for whether this price action represented genuine recovery or an orchestrated exit for larger holders; a sustained move above that band with supportive volume would alter the narrative, but continued rejection would increase the probability of a sharp correction.
