Onyxcoin Price Soars as Derivatives Surge, Funding Rate Signals Reversal

Source: CryptoNewsNet Original Title: Onyxcoin price soars as derivatives surge, funding rate signals reversal Original Link: Onyxcoin price continued its strong recovery, reaching its highest point since Oct. 2. It has soared by nearly 200% from its lowest point this year, bringing its market cap to over $422 million.

Summary

• Onyxcoin price has surged by ~200% from its lowest level this year.
• The futures open interest and volume in the spot market jumped to the highest level in months.
• The token’s funding rate has crashed, while oscillators show that it is highly overbought

Market Activity

Onyxcoin (XCN) token jumped in a high-volume environment, a sign of strong investor demand. Its 24-hour volume rose to over $224 million, continuing a trend that has persisted this year.

Most importantly, activity in the derivatives market has surged in the past few days. CoinGlass data indicate that futures open interest rose to $5.8 million, its highest level since November 3. It has jumped from this year’s low of $1.2 million.

XCN’s surge has also led to a substantial increase in short liquidations, which is usually seen as a positive development. Short liquidations occur when crypto exchanges are forced to close bearish positions as losses escalate. Short positions worth over $343,000 were liquidated on Tuesday, higher than the previous day’s $127,000.

Risk Indicators

The risk, however, is that the token’s funding rate has plummeted to the lowest level since Oct. 10, it has remained in the red since Sunday this week.

Funding rate is an important metric that looks at the small fees that bulls and bears in the perpetual futures market pay each other to ensure that the spot and futures prices are not further apart. A negative funding rate indicates that most investors anticipate that the future price will be lower than the current price.

Onyxcoin is a cryptocurrency project that enables users to stake and earn returns, with data on its website indicating a staking yield of nearly 30%. According to DeFi Llama its ecosystem has not much going on, with Onyx having a total value locked of less than $100k.

Technical Analysis

The daily timeframe chart shows that the XCN price rebounded after finding substantial support at $0.00411. Its surge happened as investors bought the dip and as the crypto market rally continued.

A closer look shows that the coin has become highly overbought, with the Relative Strength Index and the Stochastic Oscillator reaching their highest levels in months.

Therefore, the price will likely retreat in the near term, potentially to the key support level at $0.00695, its highest swing on Dec. 11, which is 40% below the current level.