Monero (XMR) Technical Analysis: Bulls Struggle With A Key Resistance

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Monero reigns as the best performer among the top 10 cryptocurrencies this week with a solid 24.48% gain against BTC and up 30.71% against the US dollar (at the time of writing). There’s been a great deal of speculation over what has caused this sudden spike in bullish activity, with the top circulating beliefs as follows:

1. Bloomberg published a recent report from Satis Group which forecasted that privacy and currency centric coins Monero, Bitcoin and Decred would be the ‘largest beneficiaries’ of the future crypto market.

These findings predicted that Monero would increase by a massive 38,391% over the next 10 years, above and beyond every other crypto project in the Top 10.
The report has caused a huge amount of contention across popular forums, particularly among Stellar, Cardano and EOS communities, which have adamantly rejected this elaborate forecast.

2. Monero has a double hard fork scheduled for October 18th. According to a recent post on Reddit, the V8 hard fork will be first and will implement bulletproofs to add an extra layer of privacy to transactions conducted across the network. The V9 hard fork will come immediately after and will ‘require’ these bulletproofs.

3. There are also a number of popular allegations that span from a Silk Road wallet trading out of BTC into XMR, to Bitmain no longer dumping its supposed stores of XMR acquired from ASIC mining the asset.

What we really want to know is how long can this uptrend continue, and is it based on genuine sentiment or merely pumped off the back of one of these conspiracy-esque rumors?

Looking at the 1D XMR/BTC chart, we can see that Monero suddenly exploded off the line from 0.0136BTC over a week ago, and began to regain lost ground in tune with bitcoin’s improving performance. After a sizeable pullback, we saw XMR bulls drive the asset up almost vertically 25% during the second impulse movement, which passed cleanly through the first resistance channel at 0.0154BTC and 0.0165BTC.

After another correction, the final impulse move was able to carry the asset a further 19% until it met its first major resisting level at 0.0191BTC.

Over 30min candles, we can see that XMR has already failed to retest this level twice since this morning, as the bullish support starts to thin out. Volume has also started to wind down as the surging uptrend loses momentum.

Other bearish signals are also starting to mount up against the asset, as short-term confidence begins to depart;

  • Candles are starting to diverge through the supporting Kumo on the Ichimoku indicator, accompanied by a bearish T/K crossover.
  • The RSI line has dropped significantly over the last few candles as momentum decreases.
  • The CMF indicator line has also passed bearishly through the signal line, which indicates that the uptrend is weakening and selling pressure is gaining.
  • Candles are also now passing through the lower Bollinger band, which tells us that the asset is performing in the lowest tier of its forecasted average price.

Monero (XMR) Price Targets

All price targets are set from the 0.018395BTC mark where the asset is currently valued.

Price Target 1: XMR will likely continue downward until it reaches the support at 0.018149BTC (-1.34%)

Price Target 2: From here we could see a brief pump back into the channel but I think momentum has already run dry for this asset and it should start to tumble back down. The next support can be found at the 0.017524BTC mark which was a key resistance in the recent bull run. (-4.73%)

Price Target 3: We could potentially see the asset retest the resistance channel above, but after failing it should then collapse again to the next lower support around 0.016886BTC (-8.20% overall).