Is Axie Infinity on a recovery path?

• Active wallets and transactions count have grown on Axie Infinity in the last month.
• A closer look, however, revealed that this might be a passing fad.

Leading play-to-earn (P2E) blockchain game Axie Infinity [AXS] has seen a sharp increase in active wallets and transactions volume in the last month, according to data from DappRadar.

According to the on-chain data provider, the number of active wallets interacting with the decentralized application (dApp) increased by 60% in the last month, reaching 88,210. Likewise, the total number of transactions completed between these unique active wallets and the dApp’s smart contracts rallied to 1.13 million, jumping by 72.39% within the same period.

Read Axie Infinity’s [AXS] Price Prediction 2023-24

The increase in activity on Axie Infinity in the last 30 days is attributed to the series of ecosystem updates that have been introduced during that period, with the most notable being the reintroduction of its Streamer Rewards Program.

Axie Streamer Rewards are back! ✨

– 600 AXS prize pool

– Exclusive creator avatar & border up for grabs

– All Axie Infinity game titles are eligible for rewards

Read the full details below & make sure to signup on the form to join the program!

? | https://t.co/VTLV5PycUO pic.twitter.com/4IFLiYntNw

— Axie Infinity (@AxieInfinity) August 17, 2023

Axie Infinity relaunched this program after its first test pilot in February when it saw around 200 Axie creators logging a cumulative of 1,500+ stream hours. To drive traction, Axie Infinity increased the total prize pool from 300 AXS to 600 AXS. 

The signs of ailing remain

Despite the surge in active wallets and transactions count in the last month, a closer look at the protocol revealed a decline in transaction volume during the same period. Although the number of transactions completed on Axie Infinity increased by almost 75%, the fiat value of these transactions declined by 8.05%, data from DappRadar showed.

As a result, within the period under review, the total fiat value of assets in the dApp’s smart contracts fell by 17.37%. 

Source: DappRadar

The significant decline in interest in P2E games has resulted in a sustained drop in the count of monthly new accounts on Axie Infinity. According to Dune Analytics, the number of new accounts created monthly on Axie Infinity plummeted by 9% between January and July. 

Source: Dune Analytics

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AXS needs help

Languishing under the control of the bears, the protocol’s governance token AXS also logged a 24% decline in value in the last month.  At press time, the altcoin traded at $4.91, per data from CoinMarketCap.

Source: CoinMarketCap

An assessment of its price movements on a daily chart revealed that AXS remained oversold amongst daily traders. At press time, key momentum indicators rested below their respective center lines.

Its Relative Strength Index (RSI) was 25.83, while its Money Flow Index (MFI) was 20.34. At these values, sell-offs amongst AXS holders exceeded accumulation. 

With the negative directional index (red) resting above the positive directional index (green), AXS bears had control of the market at press time. 

Source: AXS/USDT on TradingView