Technical Analysis and Market Entry: XMR/USD Bulls On The Verge of A Critical Bearish Market Structure Breakout

  • Monero bullish momentum has been restored, with the price running higher for three consecutive weeks.
  • XMR/USD is subject to breaking out of a critical bearish market structure.

XMR/USD: Recent Price Behaviour

Monero has been gaining ground over the last three weeks, having gained a chunky 70% within the noted period. The strong wave of upside momentum came as the bulls broke out form a descending channel structure. It contained the price from November up until the escape late in December 2019.

The current run north is the most consecutive via the weekly since October, as the bulls lay strong foundations for a recovery. XMR/USD has been able to jump to levels last seen in September, up at $74. In terms of the change its trend, it came after the prolonged period of selling pressure, from June to December.

There were provided signals from the price behaviour, that the bulls were likely to come into play. The week of 23 December, XMR/USD formed a morning star or somewhat of a long-legged Doji candlestick. These are types of formation which tend to come at the end of a trend. It has thus far proved to be the case.

XMR/USD weekly chart.

Bulls Close to Bearish Market Structure Break

Price action for XMR while being within the current downward trend has been producing lower highs and lower lows. The described market structure has been active since June when the bulls ran out of momentum. It followed such a dominating run higher in the first half of the year. XMR/USD had rallied from $38 up to $132, a whopping gain of 240%.

The detailed lower highs and lower lows are now at risk of being broken down. In terms of the most recent lower high, this was seen at around the $60-65 price range. The zone is an area of supply, as can be seen given the most recent bull run, which has been forced to slow down. XMR/USD is at the time of writing cooling and retesting the $65-60 range, via the daily time frame for support.

For the above-described bearish market structure, the market bulls will need to force a breakout and firm weekly closure above the $60-65 zone. It would then mark the confirmation that the structure has been broken, further buying momentum could then likely be seen. Confidence should be restored to attract more buyer involvement in solidifying the bull trend.

XMR/USD daily chart.

Trade Recommendation

A buy position is attractive, given the promising signs that the bull market is returning. An entry would be of interest at $60, where daily support can be seen — targets to the upside; $80, $85 and then $95. Stops would be placed below the noted support at $57.

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.