The price of monero is showing signs its recent slide may be over.
At press time, the monero-US dollar (XMR/USD) exchange rate was up slightly, rising from a low of $84.18 to $89.40 on the day's trading. But, a closer look at the charts indicates the bump may be a telling sign the privacy-focused cryptocurrency could soon break its slump.
Week-on-week, monero is down 4.3 percent, while month-on-month, the digital currency is nursing 29.3 percent loss. Launched in 2014, monero is an open-source cryptocurrency that uses innovative cryptography to obscure transactions.
In particular, today's price is a sign bulls could be gaining an upper hand in the battle to defend the all-important 61.8% Fibonacci retracement level.
A key indicator in markets more broadly, it's also the exact spot from which monero was able to rally from its July low to its record highs in late August. The 61.8% Fibonacci retracement level is now $80.91, while at the press time the cryptocurrency is trading at $89.40 levels; down 3.96 percent in the last 24 hours as per CoinMarketCap.
Looking ahead, price action analysis suggests that monero's resilience could translate into bearish-to-bullish trend change.
The chart above shows:
- Bears have twice run out of steam around 61.8% Fibonacci support of $80.91 in the last month.
- A bullish falling channel breakout on Sep 25 was followed by a bearish triangle breakdown of October 1.
- Today's candle has a long lower shadow (long lower body), which signals dip demand near the critical 61.8% Fibonacci support of $80.91.
- Here, we see that monero has been largely restricted to a narrow range of $97.34 (50% Fibonacci retracement) and $80.91 (61.8% Fibonacci retracement).
- Over the last two weeks, a move above $97.34 has been met with fresh offers, while the dips below $80.91 have been short-lived.
- Monero could revisit $97.34-$100 levels in the short-run as indicated by the long lower body of today's candle.
- On a larger scheme of things, it is advisable to go with the flow (i.e. trade the breakout). Two consecutive days-end closes above $97.34 could be followed by a rally to $120 levels.
- On the other hand, an end of the day close below $80.91 would open doors for a drop to $62.00 levels.
Bull shadow image via Shutterstock