Technical Analysis and Market Entry: Monero (XMR/USD) – One Final Pullback Before Greater Moves North
- Monero (XMR) has been on the back foot over the last four sessions after the price hit a significant area of supply.
- XMR/USD buy opportunities are eyed once a slightly deeper pullback is observed.
XMR/USD: Recent Price Behavior
The Monero (XMR) price has been under some selling pressure over the last four sessions after running into a known area of supply around the $100 level. XMR/USD has dropped around 15% within the noted period, falling from $101, which was the highest the price had been since 14th November. Before this current edging lower, the price had been enjoying a decent consecutive move to the north.
Since the start of 2019, XMR has managed to rally a significant 120%, after bottoming out at $37, the 2018 low. The price is without a doubt on a stable path to recovery. It follows from brutal market conditions observed throughout last year. XMR/USD had dropped over 90% from the all-time-high printed in December 2017 up at $512.
XMR Safety Net
There is a critical area of support which can be observed via the daily chart view – an ascending trend line. It has been running since March, and the bulls have used its comfort on several occasions during the current trend higher. The support is now tracking around $77, which could mean another 15% drop if the price requires a technical retreat.
Developers at Monero Planning New Proof-of-Work Algorithm
The privacy-based cryptocurrency XMR is undergoing plans to switch to a new proof-of-work (PoW) algorithm in October. It comes following an agreement with Arweave, which will be funding an audit of the new algorithm, according to an Arweave spokesperson.
Arweave is a global permanent hard drive built on two novel technologies; it has launched a permanent and decentralized internet, which will see Monero implementing the RandomX algorithm.
The move is something outside of the prior routine, where Monero developers would reportedly hard-fork the network once every six months. It was executed to ensure the application-specific integrated circuit (ASIC) resistance, which was done by implementing minor changes to CryptoNight.
The price via the daily chart has broken out and has retested a key zone that tracks from $94 up to $100. Given the current technical behavior, it leaves the door open to some further potential downside. The next area of safety as noted earlier is seen down at the lower acting trend line.
A buy position would be attractive upon a retreat down to the next major demand zone, the $83-$78 price range. In proximity to the noted area is the above-detailed ascending trend line, an additional confluence for taking a long position.
Eyes will be on another retest and possible break of the psychological $100 territory. Further north, $115 would be sought upon, which is the next major zone; XMR last traded up here between 3-8th November before plummeting. Finally, the $140 territory, where the price was last trading in September 2018, is the next major target. Stops should be considered just below the ascending trend line at $73, leaving enough breathing room.
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.
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