NPXS, the native token of PundiX, a cryptocurrency point of sale (PoS) solution provider, has seen a massive surge in price over the past 48 hours.
In merely two days, the price of NPXS rose by more than 130% on Binance, outperforming most major cryptocurrencies on the exchange.
There are three key reasons behind the rally: the launch of token staking, token reduction, and the overall positive sentiment around the altcoin market.
Token staking and fewer NPXS tokens
On March 13, Zac Cheah, the CEO of PundiX, reaffirmed that token reduction and staking for NPXS is happening later this month.
When the supply of a token is reduced, it immediately acts as a catalyst because it typically pushes up the price if demand remains the same.
PundiX is reducing its token supply to a 1000:1 ratio and rebranding the native token from NPXS to PUNDIX. The rebranding is fueling the overall increase in interest in NPXS, considering that the token has been consolidating for a prolonged period.
Additionally, token staking further amplifies the positive effect on the value as it leads more users to stake NPXS and refrain from selling as the token is locked up. Cheah said:
"As scheduled, $npxs token reduction starts late March, followed by (immediately or few days later) token staking. Staking reward is USD100,000 + value weekly for ten weeks. Someone said it's better to call our staking 'DeFi farming', so yea Pundi X DeFi farming is comin!"
As Cointelegraph previously reported, many cryptocurrencies saw a large rally in recent months after introducing staking.
For instance, Theta Network introduced staking for the THETA token, which coincided with the price of the token hitting a new all-time high on Feb. 14.
Traders are anticipating more "alt season"
The altcoins market is seeing significant rallies almost across the board as Bitcoin price is currently consolidating between $56,000 and $59,000. What's more, the altcoin market's capitalization has reached a new all-time high of almost $730 billion, or roughly 50% higher than in 2017.
A pseudonymous trader known as "Rekt Capital" said that explained that this is a perfect example of market cyclicality, alluding that the overall trend remains highly bullish. He wrote:
"Altcoin Market Cap launched into new All Time Highs from the very same level that launched Altcoin Market Cap into new December 2017 All Time Highs. A perfect example of market cyclicality if there ever was one."
Other notable rallies in altcoins include Harmony (ONE), Siacoin (SC), Terra (LUNA), and BitTorrent (BTT), which all surged from 40% to 140% in the last 24 hours.
Finally, the market sentiment around PundiX has been generally positive after its testnet launch on Feb. 11, as Cointelegraph reported.
Additionally, VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for NPXS on March 20.
The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements, and Twitter activity.
The VORTECS™ score for NPXS flipped from yellow to green a few hours before the price rallied on March 20 from around $0.006 to as high as $0.0082, or roughly by 30%.
As long as the altcoin market rally continues and Bitcoin consolidates above the $55,000 support area, the positive market structure of NPXS should remain intact.