by Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
- The momentum on the daily timeframe has reversed in favor of the sellers.
- If XMR can defend $135, short-term traders may be looking for buying opportunities.
It was a red week for the S&P 500 which fell 6.4% from Tuesday’s (December 13) open at 4092 to a low of 3829 on Friday (December 16). This started hurting Bitcoin on Wednesday, December 14 when BTC tested the $18,200 level as resistance. Monero also fell by 6.2% over the same period.
Read the Monero price prediction 2023-24
Despite the selling pressure of the past few days, XMR is enjoying strong support in the $135 area. Whether the bulls can force an uptrend from here largely depends on Bitcoin. The weekend could see a slow advance in the crypto market, followed by a crash on Monday, given that SPX breached the 3911 support level a few days ago.
Monero unable to break above $150, but selling volume was only average
Source: XMR/USDT on TradingView
On the daily timeframe, Monero’s trading volume was similar to the highs the asset has seen since September. The OBV showed that overall buying pressure was greater over the past four months. Proof of this was the higher lows seen on the OBV.
However, since August, the price has established a series of lower highs. This indicated a downtrend, interrupted by shorter rallies. After the November liquidation, XMR fell from $158 to $119. Since then, the price has risen to $151, but has fallen to $141 in the past two days.
The RSI broke through the neutral 50 mark and signaled momentum favoring the bears. Still, there was strong support at $135.5. This was the 50% retracement level based on a move Monero made on the charts in June and July.
Long-term investors should beware. The trend on the higher timeframes did not favor the bulls, despite the higher lows of the OBV. Short-term traders can look for buying opportunities at $135.
Long positions are seeing big sell-offs and open interest is also taking a hit
Source: Coinanalysis
Data from Coinalyze showed that positions worth $179.6 million worth of longs were liquidated on December 16. Closed longs added to the selling pressure. Meanwhile, the funding rate remained in bearish territory at -0.022%.
Open interest also fell 9% in the 24 hours to press time. Since Dec. 12, the OI has fallen from $38.2 million to $27.7 million, indicating that the bulls have been forced to close but have yet to signal a strong downtrend.
