Onyxcoin Plunges 42%, Flashes Buy Signal Amidst Bearish Sentiment

Onyxcoin (XCN) has been on a downward spiral over the past month, shedding 42% of its value. This sharp decline has pushed it into undervalued territory, often seen as a buy signal for traders looking to capitalize on discounted prices.

However, despite its undervaluation, on-chain metrics suggest the downtrend may not be over. Onyxcoin Flashes Buy Signal, But Risks Abound

BeInCrypto’s analysis of XCN’s market value to realized value (MVRV) ratio, based on a 7-day and 30-day moving average, confirms that the token is currently undervalued. Santiment’s data shows these metrics at -8.49% and -24.87%, respectively, at press time.

An asset’s MVRV ratio tracks whether it is overvalued or undervalued by measuring the relationship between its market value and its realized value. When this ratio is positive, its market value is higher than the realized value, suggesting it is overvalued.

On the other hand, as with XCN, when the ratio is negative, the asset’s market value is lower than its realized value. This suggests that the coin is undervalued compared to what traders and investors originally paid for it.

Historically, negative MVRV ratios like this are seen as buy signals. However, XCN’s steady decline over the past month has weakened bullish sentiment among holders, many of whom now bet on further losses.

This has created a feedback loop, prompting continued sell-offs and adding more downward pressure on the coin’s price. This is reflected in the coin’s persistent negative funding rate, which is at -0.022% at press time.

The funding rate is the periodic payment exchanged between long and short traders in perpetual futures markets. When the funding rate is negative, short traders pay long traders, indicating bearish sentiment as more traders bet on decreasing prices.

Moreover, XCN’s plummeting open interest confirms the weakening demand for the altcoin. As of this writing, the metric stands at $11 million, falling 14% in the past 24 hours alone.

An asset’s open interest measures the total number of its outstanding derivative contracts, such as futures or options, that have not been