Monero [XMR] faces first real test since November breakout: What’s next?

Monero tested the $440 resistance on Sunday, the 30th of November. The market-wide downturn, led by Bitcoin’s [BTC] descent back below $90k, meant Monero [XMR] also came under selling pressure.

Since that local high, it has shed 10.6%. Even so, it was one of the few relatively large-cap crypto assets pushing toward new highs recently.

Source: XMR/USD on TradingView

Since the start of November, XMR has been up 15.8%. In the same period, the two other leading privacy tokens, ZCash [ZEC] and Dash [DASH], were down 22.52% and 15.23% respectively.

While Monero has held up relatively well during the recent weeks, its performance since September has been underwhelming. ZCash has rallied 760% since the start of September, compared to Monero’s very modest 50.3%.

Since Monero showed relative strength against the market over the past ten days, AMBCrypto investigated where its price trajectory could be headed next.

Monero trend still in bullish control

Source: XMR/USD on TradingView

The weekly timeframe showed that the previous high at $420 was breached. This marked a bullish trend continuation. To the north, the next target was $518, the April 2021 high.

Source: XMR/USD on TradingView

The daily chart also exhibited a bullish swing structure. The imbalance (white box) at $360 was a target in the coming days. The rejection at $438, the local high from mid-November, was a blow to the bulls.

Understanding the indicators

The CMF on the weekly showed significant capital inflows, but on the daily chart, it was more indecisive. Similarly, the MACD reflected stronger bullish momentum on the weekly than the daily timeframe.

Source: CoinGlass

The liquidation map showed that the long liquidations up to $355 had a higher cumulative liquidation leverage than the short liquidations up to $435.

This meant that a continued drop toward $355-$360 was likely in the short term. To the north, there was a cluster of high-leverage short positions in the $440-$450 area to watch out for.

Assessing the bullish and bearish XMR scenarios

The $233 and $320 were the key swing lows that should be defended as support. The imbalance on the daily chart, combined with the liquidation map, hinted at a price drop.

This dip was likely to reach $350-$360, and would present a buying opportunity.

Final Thoughts

• Monero has held up quite well against the recent market-wide losses. However, its upside has been severely limited in recent months in comparison as well.
• With a bullish structure across the higher timeframes, a shift in market-wide sentiment could give swing traders a chance to buy XMR.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion