Synthetix (SNX) surges 13% as Upbit eases restrictions

Synthetix (SNX) has experienced a notable surge, with its price increasing by over 13% in the past 24 hours. This rally follows the decision by Upbit, a prominent South Korean cryptocurrency exchange, to remove SNX from its list of closely monitored assets. The exchange had previously placed SNX under scrutiny due to the instability of Synthetix's native stablecoin, sUSD. Earlier this year, deposits for SNX were suspended after Synthetix failed to maintain sUSD’s 1:1 USD peg. However, recent stabilization efforts, including the introduction of the “420 Pool” incentive initiative, have shown enough positive momentum for Upbit to ease restrictions on SNX.

Despite these positive developments, concerns around sUSD’s peg stability remain a significant risk to SNX’s long-term upside. At the time of writing, sUSD is trading at $0.86, indicating that the broader issue with the stablecoin's peg has not been fully resolved. SNX is currently trading at $0.585, which represents a substantial decline from its all-time high seen over four years ago.

Technical indicators suggest that SNX may be forming a bottom after months of decline. The daily SNX chart on Binance shows that the price has retraced sharply from a recent low of $0.1623 to a local high of $0.964, now hovering around the 0.236 Fibonacci level. Fibonacci extensions suggest major resistance levels at $1.17, $1.51, and $2.06. If bullish momentum continues, a move toward $1.17 could be the first major target.

The Relative Strength Index (RSI) is currently at 36.99, turning upward from oversold territory. This could be an early indication of a bullish reversal, although it is still below the 50 neutral line. Additionally, the Moving Average Convergence Divergence (MACD) line is beginning to cross above the signal line, suggesting a potential bullish crossover. However, the histogram remains shallow, indicating weak momentum.

While the technical indicators point to a potential rally, the underlying issues with sUSD’s peg stability pose a significant risk. Investors and traders should closely monitor the developments around sUSD and the broader market conditions before making any investment decisions. The removal of SNX from Upbit’s monitoring list is a positive step, but the long-term prospects for SNX will depend on Synthetix’s ability to address the stability of its stablecoin.