Technical Analysis and Market Entry: Monero (XMR/USD) – Routine Price Dip Presents Fresh Buying Opportunities

Monero
  • Monero (XMR) price has taken a regular dip as part of the broader 2019 recovery.
  • XMR/USD is being supported to the upside by a firm acting ascending trend line of support.

XMR/USD: Recent Price Behavior

Monero price action has been on the decline since the latter stages of June, after running out of much upside momentum. XMR/USD is on a stable path to recovery in 2019, after facing such a gruelling 2019. The bulls have rallied as much as 200% since the beginning of the year, from lows of $43 up to $131. Given the noted cooling late last month, XMR is now at the time of writing seen up some 93%.

XMR/USD is being supported to the upside by an ascending trend line, which has been in play since March 2019. On each occasion the price has come into contact with the support, it has driven XMR further north, giving the bulls a required boost. In proximity to the detailed trend line, an additional confluence of support is observed in the $84-$78 price range. The noted area has been providing needed comfort since 14th May, after initially acting as resistance.

XMR/USD daily chart.

Head and Shoulders Formation

Price action, which is heading to the north supported by the earlier detailed trend line, is somewhat forming a head and shoulders formation. XMR/USD has so far constructed the left shoulder and the head, with the ascending trend line acting as the neckline. The latter can be seen tracking around the $80 mark; any failure to hold via the daily could invite a strong wave of selling pressure. If the structure plays out technically, it could present the danger of sending the price back down to $40.

XMR Bugs Revealed and Patched

The development team at Monero recently reported that they had nine security vulnerabilities, as published by CCN. One of the security flaws could have allowed for hackers to steal XMR from exchanges. Up until March of this year, malicious miners had the opportunity to have used the vulnerability to create “specifically-crafted” blocks, forcing Monero wallets into accepting fake deposits for an amount selected by the attacker. Additionally, five DoS attack vectors, one of which was even labelled as “critical,” were identified.

Trade Recommendation

Given the reassuring above-noted area of support, both the ascending trend line and demand zone makes the cryptocurrency attractive for a buy. In terms of upside targets, $120, $130 and then $140 should be eyed; the round areas are all achievable once buying momentum regathers pace. Stops would be considered just below the detailed support areas at $72, leaving enough breathing room in case of excessive spikes of volatility.

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.

Author:
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.