SNX, the native token of the Ethereum-based decentralized perpetual futures protocol Synthetix, has defied today’s broader market downturn to emerge as the top-performing altcoin. Its price has surged by 24% over the past 24 hours amid renewed demand.
The surge follows growing anticipation for the launch of Synthetix’s new perpetuals exchange on Ethereum and a trading competition scheduled for October 20. However, on-chain and technical indicators suggest that the momentum may not be sustainable in the short term.
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 announced a well-timed trading competition on October 20, with a $1 million prize for the top winner.
Fueled by the growing hype around the upcoming event and the protocol’s imminent exchange launch, Synthetix’s native token, SNX, has seen a surge in trading activity, sending its price soaring. Trading at $2.11 at press time, the altcoin has climbed 22% since Sunday.
However, on-chain and technical indicators suggest that this momentum may not last.
Data from Coinglass shows that SNX’s long/short ratio has remained flat below one since September 22, indicating that bearish positioning persists despite the sharp price upswing.
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The long/short ratio compares the number of traders holding long positions against those holding shorts. A reading below one, as seen with SNX, reflects a market with bearish expectations.
Its persistent flatness suggests that most traders are still betting against the token, with no bullish shift in sentiment even as the SNX price climbs. This hints at the likelihood of a pullback in the near term.
Meanwhile, the Relative Strength Index (RSI) shows SNX has entered overbought territory, signaling that the token may 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 conditions. It ranges between 0 and 100. Values above 70 suggest that the asset is overbought and due for a price decline, while values under 30 indicate that the asset is oversold and may witness a rebound.
SNX’s current RSI reading signals that the altcoin is overextended and could face a short-term correction.
$2.58 Breakout or $1.77 Retest?
If momentum stalls and traders begin taking profits, SNX could retrace some of its gains in the coming sessions. In that scenario, its price could fall toward $1.778.
Conversely, if renewed buying pressure is sustained, as the trading competition nears, the token could consolidate at higher levels. It could breach the resistance at $2.131 and charge towards $2.580.
The post Synthetix (SNX) Surges 24% but Here’s Why Traders Aren’t Buying the Hype appeared first on BeInCrypto.