Key Takeaways
Is SNX exhibiting strength against the wider market?
Its recovery after the crash on the 10th of October, rallying to $2.58, was impressive, but the past 24 hours showed SNX weakness relative to Bitcoin.
What are the key price levels to watch?
SNX bulls showed signs of exhaustion, but they must defend the $1-$1.2 demand zone and drive a price bounce beyond $1.83 to flip the 1-day timeframe’s structure bullishly.
Synthetix [SNX] saw a 9.3% price drop in the past 24 hours. Its daily trading volume has receded almost 30%, according to CoinMarketCap data.
It underperformed the wider crypto market, which has gained 0.94% in 24 hours.
Bitcoin [BTC] managed to defend the $108k support level in the short term, and BTC bulls were wrestling with the supply around $110k in an attempt to drive a rally.
The short-term weakness of Synthetix was a concern to holders and bullish traders.
On Monday, the 20th of October, the Amazon Web Services outage affected important crypto platforms, including Coinbase and its Layer 2 network Base.
This impacted SNX’s trading activity and liquidity, dragging prices lower.
It also highlighted the risks of centralized dependencies in crypto, feeding sell-offs. Technical analysis showed that SNX was approaching a demand zone at $1.2. Can the bulls regain control of the market?
Profit-taking activity forces SNX to retrace its rally
The $1 million trading competition announced in September led to increased demand for SNX tokens as participants tried to earn a place in the competition.
Even after the liquidation event on the 10th of October, Synthetix managed to rebound strongly.
Source: SNX/USDT on TradingView
The 1-day chart showed a bearish internal structure as SNX broke down beneath the previous week’s swing low at $1.32. It was trading just above the 78.6% Fibonacci retracement level at $1.26.
Just below it, the $1-$1.2 area marked a demand zone that sparked the most recent impulse move higher to $2.58.
The technical indicators gave mixed signals. The CMF was at -0.13 to show heavy capital flow out of the market. Seller dominance was likely to drive prices lower.
However, the DMI showed that the Synthetix token continued to trend bullishly. The CMF and the bearish internal structure overrule the DMI here. The $1.2 demand zone must be defended.
Santiment data revealed a large amount of dormant token movement over the past ten days. The daily active address count has also tanked compared to this wave of selling following the 10th of October.
The mean coin age was unable to climb higher. Together, the metrics showed a lack of accumulation from SNX holders.
The high percentage of supply in profit, combined with the dormant circulation uptick, was proof of profit-taking activity, throwing doubt on SNX’s potential to recover.
