Technical Analysis and Market Entry: Monero (XMR/USD) – Bullish Technical Structure

  • Monero (XMR) sees a substantial transaction volume increase on its blockchain, resulting in an all-time-high being recorded.
  • XMR/USD price action breaks out from a bullish flag pattern structure, inviting further buying pressure.

Monero is at present enjoying a decent bull run, which has been observed over the past week of trading. The price had moved back to its highest levels seen since the start of April before the bulls lost their upside momentum. Since the most recent bounce, XMR/USD has jumped 20% at the time of writing, rallying from $60.

The price had been moving within consolidation mode after the big move came into play at the back end of March. XMR/USD at the time was trading down at $50, within a known area of demand. It went on to rally around 45% to the highest levels that had been seen since November 2018. A big area of supply then forced a stop to the bulls’ journey north.

Bullish Flag

XMR/USD daily chart.

As earlier noted, the price was moving within consolidation mode after the strong late March-early April rally. During the range-bound period, XMR/USD price action formed a bullish flag pattern structure, which was subject to a breakout higher. The bulls have managed to capitalize on this, forcing a breach and inviting further buying pressure.

If playing out to the textbook, the pole of the noted flag does equate to just over 40%. In theory, in terms of initial moves upon the breach seen, XMR/USD can still move another 40% higher, in line with the length of the pole. Should the bulls further capitalize, it could then see the price clearing a strong area of supply in the $70-$80 region.

XMR Volume Spike

The privacy-based cryptocurrency has recently seen the number of transactions on its blockchain smash records. A new all-time high was produced, with over 15,000 transactions processed through the network in a single day. BitInfoCharts compiled the data, indicating that the last highs were during the 2017 crypto frenzy, which achieved a transaction count high of around 7,000.

Furthermore, the average transaction fee has decreased to $0.025. As a result, the number of transactions has started to skyrocket from around the 4,000 area up to 9,000, seen at the back end of April.

As a recap, the Monero blockchain late last year implemented an upgrade, which saw the XMR transaction fees slashed by more than 90%. The upgrade, which came through a hard fork, included “bulletproofs.” As a result, various crypto exchanges lowered their withdrawal fees for Monero.

Trade Recommendation

Given the most recent technical development, eyes are on further moves north. Long positions are attractive from the current level, between $69-$72. The upside target would initially be $80, with a stop at $66.50, just below the upper acting trend line of the flag. Upon a breakdown and retest of the supply zone $70-$80, which will then likely act as new support, further longs could be taken. Once a small pullback has been seen within the noted area, another target would be the psychological $100 level.

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.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.