Monero (XMR) saw a surge in trading volume in mid-January, when the altcoin hit a new all-time high at $799.89. Since then, XMR has declined by 43.8%.
A recent report from AMBCrypto highlighted that Monero was likely to pull back towards $520 and between $400 and $440. This happened, but the privacy token was now sitting on key support.
Is the longer-term XMR bias bullish or bearish now?
Source: XMR/USDT on TradingView
Monero retraced much of the August rally that propelled the privacy token to new all-time highs. The swing points chosen on the chart above were based on the upward impulse movement on the weekly time frame.
Zooming in on the daily timeline, we can see that the swing pattern has remained uninterrupted. The retracement saw a bearish internal change.
The CMF was also below -0.05 and the RSI fell below the neutral 50. XMR was trading below its 20 and 50 day moving averages. Together, these signs showed that further losses were possible.
Explore the bearish scenario
With Bitcoin (BTC) facing selling pressure and Monero testing a key Fibonacci retracement level as support, things looked tough for XMR bulls. The recent rally to the ATHs saw a classic high volume high.
A decline below the $411.5 level would confirm an indicative trend on a one-day time frame. As things stand, the bullish argument for new all-time highs does not appear to hold water.
Trader Call to Action – Sell the Bounce
Source: CoinGlass
After collecting liquidity pooled between $450 and $480, XMR rebounded higher on January 26. This rebound has the potential to target magnetic areas to the north.
These liquidity pools were between $500 and $510 and between $560 and $580. In the coming days, a rebound in prices to these levels is possible. Traders should be wary of a drop below $411.5 to confirm a long-term downtrend, or a bounce towards the magnetic zones for a reversal.
Final Thoughts
- The speed of the XMR rally and its slowdown suggest the run may be over, especially with selling pressure on Bitcoin.
- A price rebound towards $560 would be a sell, unless Bitcoin manages to reclaim the $94.5k resistance and turn altcoin sentiment bullish.
Disclaimer: The information presented does not constitute financial, investment, business or other advice and represents the opinion of the author only.
