Monero Price Forecast: XMR rally at risk as RSI flashes bearish divergence
|- Monero edges lower by 2% on Monday, extending the loss from Sunday.
- Derivatives data indicates persistent risk-on sentiment among traders with heightened Open Interest.
- The technical outlook remains grim as the RSI indicator flashes a bearish divergence.
Monero (XMR) trades below $400 on Monday, extending the loss from the previous day. The intraday pullback in the privacy coin risks a double-top reversal as RSI flashes a sell signal. This also puts the rising optimism in the XMR derivatives market, indicated by heightened futures Open Interest, at risk.
Monero’s derivatives market remains optimistic
Monero retains retail interest as the privacy coins outperform the broader market. According to the CoinGlass data, the XMR futures Open Interest (OI) – notional value of all outstanding futures contracts – stands at $88.83 million, close to the annual high of $97.98 million from November 10. This indicates strength in the traders’ sentiment, anticipating potential recovery.
In line with the increasing OI, the OI-weighted funding rate flips to a positive 0.0084% after a sudden negative shift, earlier in the day. This indicates that buyers are willing to hold long positions.
Monero risks further losses as bullish momentum wanes
Monero slips below $400 on Monday, extending the 2.54% pullback from Sunday, which completes the second peak of a potential double-top pattern at $419. At the time of writing, the privacy coin is down 2%, with bears targeting the neckline at the $358 level, marked by the July 14 high.
If XMR fails to remain buoyant above $358, it could extend the decline to the 50-day Exponential Moving Average (EMA) at $344, followed by the 100-day EMA at $324.
The momentum indicators on the daily chart signal a decline in bullish momentum, as the Relative Strength Index (RSI) at 59 moves down from the overbought zone, indicating a waning of buying pressure. Additionally, the lower high formation in RSI flashes a bearish divergence compared to Monero’s double top formation, risking further losses.
The Moving Average Convergence Divergence (MACD) moves closer to the signal line, risking a potential crossover with renewed bearish momentum.
On the flip side, if XMR surpasses $419, it could target the $471 high from November 9.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.