Journalist
Posted:
- Monero saw a dramatic reversal in its bullish structure.
- A move above $115 could give short-term traders hope for continued gains, but this may not last.
Money [XMR] experienced a bullish market structure in the first week of February. During trading on February 6, XMR suffered 39.8% losses within a day.
AMBCrypto investigated the reasons for this crash in an earlier report.
At the time of writing, the price was well below the $130 mark that had served as support throughout 2023.
Holders have shown intense negative sentiment in recent days, and the futures markets have also been in favor of sellers.
Where to short XMR and its invalidation
Monero has a bearish market structure on the one-day time frame following the February 6 price action. The nearly 40% drop was followed by a 31% rebound the next day.
However, this price increase to $135 could likely be a retest of the former demand zone.
Source: XMR/USDT on TradingView
The RSI reflected a heavy bearish momentum with a reading of 36. The OBV, which had been on an upward trend until December 2023, started forming a range in the past two months. This showed buyer exhaustion.
A drop below the local OBV support could be followed by a downtrend on the price chart.
The $136 and $144 levels represented the key Fibonacci retracement levels. Therefore, they are expected to act as fierce resistance.
However, if XMR can climb above the USD 156 level, the idea of a downtrend would be refuted.
Meanwhile, a return to the $100 level and below remains likely as things stand now. XMR holders could capitulate and sell more of their assets if prices continue to fall.
The futures market is highlighting strong bearish sentiment
The price drop on the 6th was accompanied by a huge increase in Open Interest in USD per exchange. This meant that futures market participants were willing to short XMR.
Source: Santiment
The sharp drop in funding rates also indicated that the XMR market was heavily skewed in favor of the bears.
Read Monero’s [XMR] Price forecast 2024-25
Weighted sentiment fell to levels not seen in more than a year and was only slightly positive at the time of writing.
Putting the numbers and price action together, it looked like Monero would trend lower rather than higher in the coming weeks.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.