Onyxcoin (XCN) Faces 22% Decline Amidst Ongoing Pessimism

Onyxcoin (XCN) has endured another tough day, experiencing a drop of 22% within a 24-hour period, bringing its price down to a 30-day low of $0.015.

With increasing bearish sentiment around this altcoin, there are concerns that its price may continue to decline. This article delves into the contributing factors.

Ongoing Bearish Sentiment Among Onyxcoin Traders

XCN's negative funding rate is a crucial signal of trader sentiment. Data from Coinglass reveals that the funding rate has consistently been negative since December 9, currently sitting at -0.17%.

This funding rate, which is a fee exchanged between long and short traders in perpetual futures contracts, highlights that short traders are currently paying long traders. A negative funding rate suggests that the majority of XCN traders are bearish and anticipating further price drops.

Moreover, XCN’s open interest has been trending downward, indicating decreasing interest in the altcoin among market players. As of now, the open interest stands at $6 million, the lowest it has been in the past month.

This metric—open interest—refers to the total number of outstanding derivative contracts, such as futures or options, that have not been settled. A concurrent decline in an asset's price along with open interest, as is the case with XCN, signifies that traders are closing positions, opting to sell rather than buy new contracts. This trend implies that the recent price drop is driven by liquidation or profit-taking rather than fresh short selling, diminishing the chances of a swift recovery.

Bearish Trends Persist for XCN

Analyzing the daily chart reveals that XCN is trading below the Leading Spans A and B of the Ichimoku Cloud indicator, which tracks market trends and helps identify potential support and resistance levels. Being below this indicator suggests a continuing downtrend.

This scenario establishes the Ichimoku Cloud as a dynamic resistance for XCN, solidifying concerns of ongoing price declines as long as trading activity stays under the cloud and demand continues to wane. Should this trend persist, XCN’s price could potentially slide further, reaching as low as $0.011.

Conversely, an uptick in buying activity could see XCN rebound to $0.022.