Onyxcoin, marked as XCN in the digital currency world, experienced a remarkable surge of 22 times in value from the beginning of the year until the 26th of January. However, since then, there has been a noticeable pullback in its price. Despite this recent decline, the overall long-term outlook remains positive.
This period of consolidation following its significant gains could serve as a strategic pause before potentially resuming an upward trajectory.
Is It Wise to Consider Buying more XCN at the Current $0.02 Price Point?
After analyzing the movement from $0.0111 to $0.0499, key Fibonacci retracement levels were identified. Notably, the 78.6% retracement level at $0.0194 has continued to act as a crucial support level for Onyxcoin.
The rally leading to this price surge was quite impressive, especially considering the period of consolidation prior to the sharp increase in value witnessed towards the end of January.
Despite the recent downward trend over the past few weeks, Onyxcoin has managed to defend important retracement levels, suggesting a bullish undertone in the long run.
While the immediate price action may seem like a retracement, the overall trend on higher timeframes seems to favor an upward movement.
Although the market outlook may appear optimistic for potential investors, caution might be warranted as indicators like the Chaikin Money Flow (CMF) and Moving Average Convergence Divergence (MACD) are not entirely favorable. The CMF indicates significant selling pressure at -0.25, while the MACD shows signs of weakening bullish momentum.
A crossover below the zero line on the MACD indicator could signal a shift towards dominant downward momentum in the short term.
Looking at the 4-hour chart, it seems that XCN may have found a temporary floor around the $0.02 mark, forming a trading range between $0.02 and $0.0255.
On this timeframe, the market structure remains bearish, with no new swing highs or lows established in the past couple of weeks.
While the CMF briefly touched above +0.05 before retracting, the MACD reflects a neutral momentum as the price tests the mid-range level for support.
Analysis of the liquidation map indicates a concentration of high leverage long liquidations around the $0.02-$0.021 range, coinciding with the lower bounds of the established trading range.
Considering the CMF readings and the overall weak momentum, there is a likelihood of XCN revisiting the $0.02 level before potentially embarking on an upward trajectory due to the liquidity concentration in that region.
Disclaimer: The opinions expressed in this analysis are purely subjective and should not be interpreted as financial or investment advice.