Trade Recommendation: Monero

The Monero/US Dollar pair (XMR/USD) climbed as high as $469.50 on December 20, 2017. This marked the end of an impressive bull run that saw the pair grow by more than 700% in four months. From this point, the XMR/USD has been in a downward spiral. The good news is that a significant bounce is on the horizon.

Technical analysis reveal that XMR/USD is showing signs of a potential rally. First, we see the pair about to hit the apex of the large falling wedge on the daily chart. This pattern is so large that it is also visible on the weekly chart.

A quick look at the falling wedge shows that the market always bounces when it drops to the support. The market is currently sliding down the support side of the wedge. This gives us reason to believe that a bounce is in play.

On top of that, XMR/USD is also about to touch its long-term support. This trend line has existed since March 2017. The strength of this support should make it difficult for bears to push the price further down.

Lastly, we can see a bullish divergence on the daily RSI. This tells us that XMR/USD is gaining momentum. This signal also affirms our arguments that the support will hold and that will lead to a significant bounce.  

The strategy is to buy as close to $80 as possible. Should bulls hold on to this key support, they will likely inspire a rally to our target of $125.

The process may take less than a month.

Daily Chart of Monero/US Dollar on Kraken

As of this writing, the XMR/US Dollar pair is trading at $82.59 on Kraken.

Summary of Strategy

Buy: Buy as close to $80.00 as possible.

Target: $125

Stop: $75

 

Disclaimer: The writer 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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.