Onyxcoin (XCN) has exploded back into the spotlight, soaring by an impressive 171% after breaking free from a prolonged downtrend. The altcoin, which had dropped to a low of $0.007 earlier in April, has since mounted a sharp recovery, fueling renewed optimism among traders and crypto watchers.

The rally comes after a tough period for XCN. Following a brief peak at $0.049 in January, the token entered a sustained downtrend, steadily losing value over the next several months. The correction culminated in a sharp drop to $0.007 on April 7. However, this bottom marked a critical turning point as buying activity surged almost overnight.

Since then, XCN has rebounded with strength, fueled by a technical breakout that saw it breach a key resistance line. This move sent a strong signal to the market, indicating that bullish forces were once again in control.

One of the clearest signs of this momentum shift is the token’s Balance of Power (BoP) indicator, a metric used by traders to measure the relative strength of buying versus selling pressure. Currently sitting at 0.24, the positive BoP highlights that buyers are firmly in the driver’s seat, supporting the current uptrend. A BoP value above zero suggests that demand is outpacing supply, often a precursor to further price gains if the trend holds.

This bullish sentiment in the spot market, however, contrasts sharply with the view in the derivatives space. The funding rate for XCN perpetual futures remains in negative territory, now at -0.032%. A negative funding rate means that short sellers are paying long holders, indicating that more traders are betting against the coin’s price rise. This creates a divergence in sentiment: while spot market participants are actively buying, derivatives traders remain skeptical.

Such a setup can create the perfect conditions for a short squeeze. If the price continues to climb despite bearish bets, short sellers may be forced to cover their positions by buying back into the market, potentially fueling an even sharper rally.

Technically, XCN has also made a significant move by pushing above its 20-day exponential moving average (EMA). This crossover is viewed by many traders as a bullish signal, indicating that the token has entered an upward trend. A sustained price movement above the 20-day EMA often suggests that momentum is building, attracting more buyers to the market.

With these signals aligning, traders are now closely watching whether XCN can sustain its climb. If current momentum holds, the altcoin could test the $0.023 level in the near term. This would mark a key psychological barrier and potentially open the door for even stronger price action.

On the flip side, a pause or correction in the rally could see the token fall back toward the $0.016 range, which now acts as a support level. However, as long as demand remains strong and the BoP continues to favor buyers, any pullback may be short-lived.

What makes this rebound particularly noteworthy is the divergence between the spot and derivatives markets. With buyers showing confidence while short-sellers dig in their heels, XCN finds itself at a pivotal point. Should bullish pressure remain dominant, the token could defy bearish expectations and stage a continued recovery.

In a market driven by sentiment and momentum, Onyxcoin’s recent rally is a reminder of how quickly tides can turn. For now, XCN is showing strength — and traders are watching closely to see just how high this breakout can go.