Onyxcoin (XCN) has experienced a substantial price drop in the past month, slipping from $0.035 to $0.013 today. This downward trend mirrors the movement of Bitcoin, with the altcoin seemingly tracking the overall market sentiment.
The sharp decline in price has created uncertainty, especially among futures traders.
Traders Pulling Back on Onyxcoin
The open interest in Onyxcoin has taken a significant hit, plummeting by over 50% in just one week from $10.8 million to $4.7 million. This decline indicates traders withdrawing their investments due to the lack of recovery in the altcoin. The diminishing open interest signals a bearish outlook and apprehension stemming from the stagnant growth of the asset.
Furthermore, the rapid decrease in open interest suggests hesitation among traders to invest in Onyxcoin in the near term. The absence of any uptrend momentum has likely led many to explore more stable options. This reluctance further dissuades potential new entrants, reinforcing the prevailing negative sentiment.
Onyxcoin's correlation with Bitcoin currently stands at 0.81, highlighting a strong relationship between the two. This tight correlation implies that XCN closely mirrors Bitcoin's market movements. As Bitcoin recently dropped below $80,000, its bearish trajectory spilled over to Onyxcoin, dragging its value down.
The interconnection between XCN and Bitcoin underscores the significant impact of the broader market on altcoins. The downward trend in Bitcoin, characterized by sharp declines, plays a crucial role in Onyxcoin's continued descent. If Bitcoin struggles to recover, the price of Onyxcoin could endure further pressure, with limited potential for a reversal unless there is a general market improvement.
The downward trend persists for XCN, with its price falling by 15% in the last 24 hours to $0.013 after losing critical support at $0.015. Despite holding above the $0.012 support level currently, the bearish trend remains dominant, leaving the altcoin susceptible to additional declines.
Should the downtrend continue, XCN might drop below $0.012, testing the next support level at $0.010. This would extend the ongoing downward trend, potentially amplifying losses for investors. A breach of this level would signify a substantial setback, indicating a deeper bearish outlook.
Nonetheless, if Bitcoin gains momentum and XCN follows suit, the altcoin could surpass the $0.018 threshold. Successfully converting this resistance into support would invalidate the bearish narrative, offering hope for price recovery and signaling the potential end of the downtrend.