• The short-term holders were sitting on sizable gains, and this could lead to some selling pressure from profit-taking
• The swift reaction from the 78.6% Fibonacci level meant that an XCN bullish structure shift could materialize in the coming days

Onyxcoin [XCN] has climbed higher by 16% in the past 24 hours and its daily trading volume is up by 12%.

During the recent market-wide sell-off, Onyxcoin lost 30% when it reached the lows at $0.018. However, it has bounced 68% from those lows in the 30-hours since.

This volatility is a trader’s paradise, and the strong bullish reaction from the lows could be a sign of underlying strength. What have XCN bulls got up their sleeves?

In the second half of January, Onyxcoin saw a strong surge in prices and on-chain activity.

This rally was used to plot a set of Fibonacci retracement levels. The recent price drop saw the 78.6% level at $0.0194 retested.

The strong bounce of nearly 70% since then was a good sign for investors. The quick reaction showed bullish conviction. The 78.6% level was tested, and the price jumped away.

The fair value gap at $0.0282 was the next short-term support zone that bulls are expected to defend.

The H4 RSI was back above neutral 50, indicating upward momentum. The OBV also began to trend higher, reflecting increased buying volume.

However, the market structure was bearish, with $0.0347 being the recent lower high for the price to overcome. Such a move would flip the structure to a bullish one.

The 7-day MVRV was slightly negative, but the 30-day MVRV was strongly positive at 51.39%.

Therefore, most of the short-term holders were in profit, and this could entice them to take profits and contribute to the selling pressure.

Realistic or not, here’s XCN’s market cap in BTC’s terms

The Network Value to Transaction (NVT) divides the XCN market cap by its daily circulation. A relatively high ratio indicates the network is expensive compared to the value being transmitted on the network.

This had been the case in December and early January, but increased activity meant the token was not overvalued at press time, according to the NVT.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion