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
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
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.