Monero: fundamental and technical analysis. Finding key levels for XMR and analysis of the future scenario.
In this article, candlestick analysis, panoramic market survey, market balance level analysis, and market volume analysis were used.
For more than a month, I have not mentioned Monero. It's time to take a look at the fundamental analysis of this coin and update the forecast for XMR for the near future.
Monero has dropped heavily in the last 30 days both against Bitcoin (-32%) and USD (-48%). The chart above clearly shows how dramatic the fall was.
Such a drawdown causes a lot of questions both from outside observers and from the investors themselves.
What is the reason for this collapse?
In order to answer this question, let's first figure out the reasons for the growth of XMR in April, from where it fell down.
If you look at the nature of the April growth,you will see it was very, very fast.
In the 30-minute chart above, you can see how on April 18, the XMRBTC ticker soared by 20% in just a couple of hours. Judging by the huge single outbreaks of volumes, from the point of view of technical analysis, the diagnosis is obvious - manipulation, simple pumping of the coin.
However, I still decided to test my theory hoping to find some fundamental basis for this.
In the end, I did find the grounds for the pump. It turns out that on April 18, Monero celebrated its official birthday. I have no confirmed information, but I have a feeling that the team of developers and the entire Monero community decided to celebrate the date like this.
I don't know about you, but I'll put this date on my calendar and try to be thoroughly prepared for the next 'birthday'.
It turns out that there weren't really any fundamental reasons, it was just a bubble.
However, the pumpers deserve soem credit, this bubble came just in time in the light of the negative events associated with this crypto.
And, I must say, there were enough negative events:
- April 30 - news about a possible ban for the Japanese crypto exchanges on working with anonymous currencies;
- May 23 - South Korean stock exchange Korbit delists Monero
- May 28 - rumors about the scam of Freewallet and theft of XMRs
In addition to all this, there are the following emerging problems with Monero's blockchain:
transactions get declined,
translations get frozen,
wallets do not synchronize,
Error 502 comes up on explorer sites
the collapsed hashrate and the risk of a 51% attack
All this exerts significant pressure on the coin and makes it look for the bottom.
What do we have from the point of view of technical analysis?
If you look at the monthly timeframe, the situation isn't great, to put it mildly. We see how the last May candle closed much lower than the April one. The next key level for the bears here is around the January low, at the border with 0.01979 BTC.
If this line is taken, the situation may become quite tragic as the next support level will only appear at 0.014 BTC.
The weekly chart confirms our concerns. We see that the lower limit of the Keltner channel is exactly at the same level at 0.01979. This overlap enhances the strength of this level on the one hand and increases its significance for the manipulator, and therefore, the desire to take it will be even greater, on the other.
However, the correctional movement is prevented by falling volumes. This signal hints that there isn't enough strength to take this key line.
In the case of a rebound from the 0.019 BTC level, a good target for bullish correction will be the middle of the Keltner channel, which almost coincided with the control point of the front volume indicator at around 0.024 BTC.
In the daily chart, the situation is fundamentally the same. We see how the ticker reaches the coveted support line at 0.0197 BTC. The volumes are systematically decreasing, which confirms the approach to the key zone.
The most anticipated movement after such a sharp drop will be the sideways movement with a potential retest of level 0.0236 BTC.
The indicators are still weak and do not indicate reveral either. Both MACD and Stochastic RSI are in the bearish zone. According to the Stochastic, we can see a bullish divergence, but there one small divergence is not enough now for entering buy positions.
The 12-hour chart looks a little more optimistic. MACD along with the Stochastic show a bullish divergence, which inspires confidence at least in a temporary stop at a level of 0.20 BTC.
Monero feels worse than the market and while there are complaints about the operation of its blockchain, so the downside pressure will only intensify.
The most likely scenario for the XMR movement will be consolidation around 0.020BTC with an attempt to rebound to the control point in the area of 0.024 BTC. However, this scenario will take effect only in case of explicit signals for a reverse. Breaking the level of 0.0198 will be a critical moment for Monero. Therefore, this level should be closely monitored.
Key support levels for the week:
- 0,01979 BTC – touch probability is high;
- 0,016 BTC – touch probability is low;
Key support levels for the week:
- 0,022 BTC - touch probability is high;
- 0,0236 BTC - touch probability is above medium;
- Movement above 0,24 is unlikely.
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Price chart of XMRBTC in real time mode
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