Technical Analysis and Market Entry: Monero Forms Deadly Evening Star But Saved By Critical Trend Line
- Monero has recently fallen victim to some touted profit-taking, subject to ending a seven-week run higher.
- XMR/USD must force daily closure above $85 resistance, or be at risk of bull run reversal.
XMR/USD: Recent Price Behaviour
Monero (XMR) price action recently lost some of its upside momentum, XMR/USD had been on a strong run from the very start of 2020. The price had initially started the year down at depressed levels of $43, which at the time was the lowest seen since February 2019. Market bulls managed to push XMR into an aggressive move north, rallying more or less for seven consecutive weeks.
The price during its upswing within the noted period gained a whopping 118%, the best run seen since March – April 2019. All of this incredible momentum had appeared to have come from a technical breakout of a descending wedge structure. A strong impulsive move to the upside was seen from this pattern, inviting much buying pressure. Despite all of the noted bull action, there has been a noteworthy technical pullback.
Weekly Chart View
Price action via the weekly chart view, with last week’s closure, saw the formation of a bearish evening star candlestick, which typically indicates an incoming change in trend. The bearish candlestick pattern has so far been followed up within another weekly closure in the red, as seen at the time of writing. Should XMR/USD bears force a closure below last week’s close, then this would be a further confirmation of downside to come.
Daily Chart View
There is a long-running ascending trend line that is viewable via the daily chart view, which has been in play since the commence of 2020. The downside pressure seen of late did force another test of this support, which resulted in a decent bounce back north. In proximity to this was the 38.2% Fibonacci and also a demand zone, all helping XMR/USD from completely losing ground to the bears.
Monero (XMR) Support Added By Bitsa
Popular prepaid cryptocurrency prepaid card provider, Bitsa, as announced the support for the privacy-based crypto Monero (XMR). Bitsa Cardholders will now be able to make payments and transfers in XMR cryptocurrency. The announcement reads in part:
From now on, Monero (XMR) will be admitted to be used as a top-up currency for the Bitsa Card prepaid card, thus allowing all types of transactions in physical stores and online.
The card provider added:
Buy in physical stores and e-commerce, make SEPA transfers, transfer money between cards, etc. With Bitsa Card converting Monero (XMR) to euros to make purchases and transfers is a fast, simple and safe process. And all from the app!
In terms of bias, it is very much subjective on what XMR/USD does next. There are two scenarios which are of interest, for either the upside or move lower. In terms of the move lower, XMR/USD bears would need to force a breakout and retest of the noted trend line. Upon a successful daily breach and closure below, targets would be eyed at; $70, $64 and then $57. Stops for this noted entry would be placed at $82.
The scenario for upside would be upon a breakout and closure above via the daily at a resistance of $85. Targets to the north here are eyed at; $90, $100 and then $107. Stops to be placed at $78.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.