Here is the “but” of Monero [XMR] draw a downtrend

Here is the “but” of Monero [XMR] draw a downtrend

Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

  • Monero (XMR) was bearish on the daily chart
  • High positive sentiment over the weekend has stabilized

Monero (XMR) the bulls were cut to size over the weekend as the bears threw a massive party. This was evidenced by the bearish engulfing pattern (a small green candle followed by a larger red candle) on the charts. This indicates that the bears will soon lower prices.

Read Monero [XMR] Price Prediction 2023-24

The bulls attempted to regain control on Monday, pushing the price of XMR above $135.2. However, the bears furiously neutralized their efforts and pushed the price lower, as seen by the shooting star (long-tailed red candlestick).

Recent price action has formed a bearish pennant pattern. Should a bearish breakout occur, XMR could see a deep dip towards $104.1.

XMR falls below its 3-month trading range

Source: XMR/USDT, TradingView

After a false bearish breakout from a bearish pennant pattern in June, XMR posted a rally leading to the ATH of $174.2 in August. Since mid-July, XMR has been confined to a range of $135.2 to $167.5, with $154.1 as the midpoint.

On November 9, XMR fell below this range and moved into a bearish market structure. The Relative Strength Index (RSI) was at 39, below the neutral level of 50 and the On Balance Volume (OBV) has been stable for about a month. These indicators therefore support the bearish structure of the market.

Therefore, a downside break could occur, causing the altcoin to fall to $104.1 in the long term.

However, the bearish pennant is similar to the line formed in June (blue lines). So, if history repeats itself, XMR might see a false bearish breakout before rallying to the mid-range at $151.4 in the long term. This would invalidate the bearish bias.

Neutral sentiment could undermine bullish price action as development activity rebounds

Source: Santiment

According Saniment, the high weighted positive sentiment seen over the weekend has stabilized. The elevated sentiment corresponded to an increase in development activity on the Monero network.

A drop in development activity then translated into a reduction in positive sentiment. There was a slight increase in development activity at press time, despite the neutral sentiment. Interestingly, there was also a slight increase in price movement.

Long-term investors should therefore follow the development activity of the network to assess its viability and its ability to attract other long-term players.

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