XCN rallies over 40%, can it hold on to these gains?

$XCN crypto surged to as high as 43% over the past day as Onyx announced the launch of its own Layer-3 blockchain.

Onyxcoin’s token ($XCN) broke out of its four days of downtrend to an intraday high of $0.033 on Feb. 4. Today’s gains pushed its market cap to nearly $1 billion while extending its monthly gains to over 1,000% as of last check Tuesday afternoon, Asian time.

$XCN’s price rally came along with a jump in demand and trading activity. Over the past 24 hours, the altcoin’s daily trading volume jumped 20% to over $434 million, while open interest in its futures market was up 17% to nearly $21 million per CoinGlass data.

What did $XCN rally today?

The key catalyst behind $XCN’s rally today is the launch of its own Layer-3 blockchain, the Onyx $XCN Ledger. According to an excerpt from its official blog post, the blockchain is “designed for financial-grade applications while offering near-instant confirmations and low fees.”

Built on Arbitrum Orbit and secured by Coinbase’s Layer-2 chain, Base, the platform will use $XCN as its native gas token and implement EIP-1559 to burn tokens with every transaction. Burning tokens permanently removes them from a crypto asset’s total supply, theoretically creating deflationary pressure and scarcity, which can drive demand and lead to a price increase.

Buyer demand for $XCN has also surged ahead of the $XCN ledger’s mainnet launch. According to CoinGlass, since Jan. 27, outflows from centralized exchanges have consistently surpassed inflows.

$XCN has also benefited from Bitcoin’s (BTC) recovery, along with the broader crypto market, following over $2 billion in liquidations the previous day. The leading crypto asset rebounded to the $100k level on Tuesday morning, aligning with a 4.6% jump in the global crypto market cap after President Donald Trump reached an agreement with the Canadian and Mexican presidents to pause the imposition of his controversial tariffs for a month.

$XCN price analysis

$XCN rallies over 40%, can it hold on to these gains? - 1">

$XCN price, 50-day and 200-day MA — Feb. 4 | Source: crypto.news

On the daily chart, $XCN’s price remains high above the 50-day and 200-day moving averages, which means while $XCN’s bullish trend still persists, the asset is approaching an overbought level and could face a potential reversal soon.

$XCN MACD and PP0 chart — Feb. 4 | Source: crypto.news

This is confirmed by the MACD and price oscillator lines pointing downwards which also signals a potential reversal of the current trend. The Relative Strength Index also points to a bearish divergence with the price which signals weakness in the ongoing trend with a potential reversal or correction on the horizon.

Based on these signals, $XCN could retreat to the psychological support level of $0.025. However, this scenario may be invalidated if Bitcoin regains its bullish momentum in the coming days.

At press time, $XCN was trading at $0.0299 per coin still up 12.4% over the past day.