Onyxcoin (XCN) has been struggling recently, losing 42% of its value over the past month. Although this drop has placed the token in a discounted state, often viewed as a buying opportunity, on-chain data indicates that the bearish trend could continue. The latest metrics suggest that while Onyxcoin is undervalued, the market conditions surrounding the token are not in its favor.

Undervalued But Still Under Pressure

At first glance, the significant price reduction in Onyxcoin could attract investors looking for assets at a discount. According to market value to realized value (MVRV) data, XCN is currently undervalued. A negative MVRV ratio indicates that its market value is lower than its realized value, suggesting that the asset is trading below what early investors paid for it.

Currently, the 7-day MVRV ratio sits at -8.49%, with the 30-day moving average at -24.87%, as reported by Santiment. Typically, when an asset has a negative MVRV ratio, it suggests that the coin is priced lower than its real value, often signaling a buying opportunity. However, the price’s continued decline suggests that market sentiment is not yet ready to flip in favor of buyers.

Weakening Market Sentiment

Despite the token’s undervaluation, Onyxcoin’s market sentiment remains decidedly bearish. This is evident from its negative funding rate of -0.022%. In perpetual futures markets, the funding rate reflects the balance between long and short positions. A negative funding rate indicates that short traders are dominant, meaning the market expects further price declines.

Additionally, XCN’s open interest, which measures the total value of unsettled futures contracts, has decreased by 14% in just 24 hours. As of the latest data, open interest stands at $11 million. A drop in open interest indicates that traders are closing their positions, further emphasizing a decline in market interest and signaling weakening demand for the asset.

Technical Indicators Show Bearish Momentum

The technical indicators for XCN further support the bearish outlook. The Relative Strength Index (RSI), which helps measure whether an asset is overbought or oversold, currently sits at 45.55. Since the RSI is below the neutral 50 mark and trending downward, it suggests that selling pressure is building, and Onyxcoin may not find support at its current level.

When an asset’s RSI falls below 50, it often indicates that sellers are in control, with little buying interest to push the price up. If this trend continues, Onyxcoin’s price could drop further, with key support levels at $0.011.

Potential for a Reversal?

While the current outlook for Onyxcoin appears bearish, the possibility of a price rebound still exists. If market sentiment shifts and buying pressure returns, XCN could see an upward move. However, this would require a significant reversal in market dynamics, particularly an increase in demand and trading volume.

If Onyxcoin manages to gain traction and overcome its current resistance levels, there is potential for a price recovery. The token’s price could rise back to its year-to-date high of $0.049, but this would depend heavily on favorable market conditions and renewed investor confidence.

Conclusion

Onyxcoin (XCN) has entered undervalued territory following a significant price drop, but bearish on-chain metrics, including a negative funding rate and declining open interest, suggest that further downside risk remains. Traders should monitor the support levels around $0.011 for potential signs of reversal. However, without a shift in market sentiment, the token could continue its downward trajectory.