Monero (XMR) experienced a slight dip of 4.09% recently. This decline originated from the $419.4 peak reached on Friday and began around the critical resistance level of $418. This price point has faced repeated tests over the past six weeks.
Last week's analysis suggested potential upward targets for XMR at $420 and $450, contingent on successfully testing the $360 support zone, which proved accurate. However, with Monero encountering significant selling pressure around the $420 resistance, the question arises: will the upward momentum resume, or will the price correct back towards the $360 region?
Bearish Divergence Concerns
Analyzing the weekly chart reveals that the overall structure still leans bullish. The successful defense of the $367 level, corresponding to the 50% retracement, fueled a rally to $419 last week. The Relative Strength Index (RSI) also supports a bullish outlook, remaining at 59.
However, the On Balance Volume (OBV) indicator presents a contrasting signal. Declining trading volume over the past seven months, reflected in lower OBV peaks, indicates weakening demand, suggesting a potentially unsustainable uptrend.
On the 4-hour timeframe, the price structure remains positive, but technical indicators are showing signs of reversal. The RSI has fallen below the neutral 50 threshold, signaling a shift in momentum towards sellers.
Simultaneously, the OBV has broken below the previous week's low, indicating increased selling pressure. Given these developments, the $395 support area will likely be tested soon. The key question is whether buyers can maintain their position.
Potential Scenarios and Trading Strategies
- Bullish Scenario: If the bullish structure on the 4-hour chart holds, a rebound is possible. A price correction toward the psychological $400 level, combined with Bitcoin's BTC recovery above $90,000, could boost short-term market sentiment.
- Trader Strategy: Traders who have opened long positions should consider taking profits now. Rejection at the $420 level suggests that the upward momentum is insufficient to push the price to $450, a necessary condition for establishing a sustained uptrend.
Current signals indicate a potential further decline below $400. However, the extent of the correction remains uncertain. Investors should monitor key support areas such as $395, $380, and the $360 demand zone. To ensure safety, new buying decisions should be considered after Bitcoin surpasses the $94,000 mark again.
| Support Level | Significance |
|---|---|
| $395 | Immediate support level, likely to be tested. |
| $380 | Secondary support level, could act as a buffer against further declines. |
| $360 | Strong demand zone, representing a key area where buyers are likely to emerge. |
Monero (XMR) faces its first significant challenge after its November breakout, and the future trend remains uncertain. Several altcoins are at risk of extending their losses as the cryptocurrency market weakens.
FAQs
Is Monero (XMR) likely to go up or down in the near future?
The article suggests a potential decline below $400 due to selling pressure and weakening demand, but a rebound is possible if the $400 level holds and Bitcoin recovers. It's uncertain, so monitor key support levels.
What are the key support levels to watch for Monero (XMR)?
The article identifies $395 as the immediate support, $380 as a secondary support, and $360 as a strong demand zone where buyers are likely to emerge. These levels are crucial for monitoring potential price corrections.
Should I sell my Monero (XMR) now if I'm holding a long position?
The article advises traders with long positions to consider taking profits now, as the rejection at the $420 level indicates insufficient upward momentum to reach the $450 target. It suggests a potential further decline.
You've got the context, now make it count. Capitalize on your new knowledge and explore early investment opportunities on Discover the top crypto premarket platform Whales Market.