LUNA and AVAX Surge Ahead; Axie Infinity Faces User Backlash

Chart of the Day





On Wednesday, and much to the delight of most investors, prices within the crypto market continue to inch upward. However, it is important to take note that this rally is primarily a spot-driven one that is yet to be reflected in the derivatives market, as the futures basis and funding rates are still trapped within the negative territory when it concerns the latter.



Going back to the good news, BTC has risen by another 2.6% in the last 24 hours, and is currently consolidating its gains just below the $45k level. On one hand, a clear move above the $45k handle will likely send the number one cryptocurrency by market cap to greater heights. On the other, a downside correction will likely be triggered if the price dips below the $43k support level. In a similar vein, ETH has established a strong foothold above the $2,900 level after posting a 1.5% gain from 24 hours ago, whilst most major altcoins have also been extending their gains since the start of the week. LUNA seems to be leading this altcoin charge from the vanguard on the back of a staggering 66.8% surge in the past seven days, while AVAX has also been pumping out decent double-digit percentage gains within a similar timeframe. When it comes to monthly performances by market-cap weighted indices, however, BTC has emerged as the top performer of February with a double-digit percentage gain in its first month of positive performance since October of last year. The large-caps are trailing behind with a 9% gain, while the mid-to-small-caps seem to have stagnated, as they have ended the month of February at the very same point that they started from at the beginning of the month.



Additionally, most L1 tokens, with the exception of LUNA and AVAX, are still actually underwater if we are to consider a one-month timeframe. LUNA's parabolic price action over the past two weeks in spite of the market turmoil can largely be attributed to the injection of fresh capital inflows into its ecosystem as well as its impending lockdrop event. On the other hand, AVAX's rise can be better rationalized by the fact that it has been exhibiting a much stronger correlation to BTC than many of its L1 counterparts. 





Talk of the Town





Play-to-earn pioneer Axie Infinity recently became the first NFT series to cross the $4 billion mark in total trading volume. However, an undercurrent of displeasure has been brewing amongst many of its players in response to a series of changes to the project's token rewards model and transaction fees that were proposed by Sky Mavis to salvage the declining Axie economy. In particular, Sky Mavis's decision to raise the marketplace transaction fees from 4.25% to 5.25% has incited great anger amongst Axie's users, many of whom were not shy to explicitly express their discontent on social media. However, there are also some people, including Sky Mavis' Growth Lead Jeff Zirlin, who believe that this rate adjustment is the best option that the Sky Mavis team can take to ensure that the Axie ecosystem is a sustainable one.