Axie Infinity Recovers September Losses – But AXS Price Faces New Threats

The overall cryptocurrency market has been under pressure, but gaming tokens have managed to stay relatively insulated and have shown impressive gains. The gaming sector experienced a weighted average increase of about 40% over the month, with Axie Infinity's AXS token being one of the top performers.

Key Takeaways

Axie Infinity (AXS) has regained ground lost since September 12, 2025, nearly bringing many holders back to break-even.
Investor sentiment appears cautious as AXS reaches overbought territory.
Spot market activity indicates a shift, with capital exiting and trading volumes decreasing significantly.
Mixed signals come from the derivatives market, with bullish sentiment in perpetual futures but bearish positioning overall.

Despite its recent recovery eliminating September's losses, Axie Infinity faces certain threats that could hinder further price growth.

Axie Infinity (AXS)

Cautious Investor Sentiment

As AXS staged its rally, investor positioning became increasingly aggressive, raising concerns about the sustainability of this upward trend. Currently, the Relative Strength Index (RSI) has climbed above 70, indicating that AXS is in overbought territory. Historically, such signals have often preceded short-term price peaks rather than lasting breakouts.

The TradingView chart highlights that as AXS prices increase, the RSI remains high, which could lead to a potential downward correction in the near term.

AXS technical indicator

Source: TradingView

Despite these risks, the downside appears limited for the moment as the Accumulation/Distribution indicator has slightly decreased but remains positive. This suggests that while selling pressure is increasing, the overall market structure is still supportive. Therefore, any potential pullback might be corrective unless accumulation trends continue to weaken.

Spot Investors Pull Back

Recent activity in the spot market is one of the clearest signs indicating a change in sentiment, as capital begins to leave the market. Netflows from exchanges showed that spot traders sold approximately $91,000 worth of AXS in the past 24 hours. This represents a noteworthy departure from the steady buying observed during the rallies.

AXS volume chart

Source: CoinGlass

Additionally, overall trading activity has sharply decreased, with CoinGlass reporting a 21% decline in volume to around $2 billion, translating to a drop of more than $400 million. When prices rise despite falling volume, it typically indicates weakening momentum. Historically, such conditions signal either a phase of consolidation or a corrective move.

Mixed Signals in the Derivatives Market

Data from the derivatives market presents a mixed outlook. The Taker Buy/Sell Ratio indicates that bullish sentiment remains strong in the perpetual futures sector, as taker buy orders exceed sell orders. However, the funding rate paints a different picture. The OI-Weighted Funding Rate has turned notably negative, suggesting that short positions have outnumbered long ones.

AXS Open Weighted funding rate

Source: CoinGlass

According to CoinGlass, the funding rate stood at -0.1286% at press time, indicating that bearish traders are paying funding fees to maintain their positions. If negative funding continues alongside a decline in spot demand, downward pressure could mount. Such a situation could increase the likelihood of a more significant correction phase for AXS.

Conclusion

In summary, while Axie Infinity has successfully recouped losses from earlier this month, potential threats loom. Investors should keep a close watch on market signals that may indicate shifts in sentiment or momentum. Understanding these dynamics will be crucial for anyone involved or interested in AXS's future performance.