Synthetix (SNX) Surges 24% but Here’s Why Traders Aren’t Buying the Hype

SNX, the native token of the Ethereum-based decentralized perpetual futures protocol Synthetix, has defied right now’s broader market downturn to emerge as the top-performing altcoin. Its worth has surged by 24% over the previous 24 hours amid renewed demand.

The surge follows rising anticipation for the launch of Synthetix’s new perpetuals trade on Ethereum and a buying and selling competitors scheduled for October 20. However, on-chain and technical indicators counsel that the momentum will not be sustainable in the brief time period.

SNX Momentum Builds Ahead of $1 Million Contest, but Bearish Bets Signal Caution

Ahead of launching the first perpetuals DEX on the Ethereum mainnet, scheduled for later this quarter, Synthetix has introduced a well-timed buying and selling competitors on October 20, with a $1 million prize for the high winner.

Fueled by the rising hype round the upcoming occasion and the protocol’s imminent trade launch, Synthetix’s native token, SNX, has seen a surge in buying and selling exercise, sending its worth hovering. Trading at $2.11 at press time, the altcoin has climbed 22% since Sunday.

However, on-chain and technical indicators counsel that this momentum could not final.

Data from Coinglass reveals that SNX’s lengthy/brief ratio has remained flat under one since September 22, indicating that bearish positioning persists regardless of the sharp worth upswing. 

For token TA and market updates: Want extra token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

The lengthy/brief ratio compares the variety of merchants holding lengthy positions towards these holding shorts. A studying under one, as seen with SNX, displays a market with bearish expectations. 

Its persistent flatness suggests that the majority merchants are nonetheless betting towards the token, with no bullish shift in sentiment at the same time as the SNX worth climbs. This hints at the chance of a pullback in the close to time period.

Meanwhile, the Relative Strength Index (RSI) reveals SNX has entered overbought territory, signaling that the token could also be due for a cooldown. As of this writing, the key momentum indicator sits at 72.62. 

The RSI indicator measures an asset’s overbought and oversold market situations. It ranges between 0 and 100. Values above 70 counsel that the asset is overbought and due for a worth decline, whereas values beneath 30 point out that the asset is oversold and will witness a rebound.

SNX’s present RSI studying alerts that the altcoin is overextended and will face a short-term correction.

$2.58 Breakout or $1.77 Retest?

If momentum stalls and merchants start taking earnings, SNX might retrace a few of its positive aspects in the coming classes. In that state of affairs, its worth might fall towards $1.778.

Conversely, if renewed shopping for strain is sustained, as the buying and selling competitors nears, the token might consolidate at larger ranges. It might breach the resistance at $2.131 and charge towards $2.580. 

The publish Synthetix (SNX) Surges 24% but Here’s Why Traders Aren’t Buying the Hype appeared first on BeInCrypto.