- Monero (XMR) plunged 15.15% to $331, wiping out most of May’s gains, as bearish technical indicators signal continued downward pressure
- However, growing spot accumulation and bullish sentiment in the derivatives market suggest a potential rebound may be on the horizon.
Monero (XMR), one of the leading privacy-focused cryptocurrencies, has experienced a sharp decline in the past 24 hours, plunging by 15.15%.
This has caused a blod bath that has effectively erased most of its gains from May. The current price sits at $331, slashing its monthly increase to just 17%.
While this drop raises concerns among traders, emerging data suggests that this dip might not last long.
Technical Breakdown: Support on Shaky Ground
XMR’s decline has brought it down to a critical level at $331, which aligns with the 50% Fibonacci retracement. Historically, this level acts as a strong support zone, but recent price action tells a different story.
Over the last three days, Monero has broken through multiple support levels, signaling strong bearish momentum and casting doubt on whether $331 can hold.
If this level fails, analysts point to a fair value gap (FVG) demand zone below, where Monero could find renewed buying interest. This area could act as a potential rebound point if buyers continue stepping in.
Buyers Show Confidence Despite Sell-Off
Despite the steep drop, there are signs of optimism. Spot market activity reveals that traders accumulated over $1.59 million worth of XMR during the dip, with many tokens being transferred into private wallets for long-term holding. This behavior suggests confidence among investors who view the current price as a buying opportunity rather than a red flag.
Additionally, the derivatives market mirrors this bullish undertone. The Open Interest-Weighted Funding Rate has remained positive for over a week, indicating that the majority of futures traders are betting on a price rebound. However, going long at current levels carries risk, a further drop could trigger liquidations if stop losses are hit.
Technical Indicators Still Flash Bearish
Despite bullish sentiment in some corners, key technical indicators point toward continued downside. The Bollinger Bands (BB) show that XMR has breached the mid-band, a sign that bearish pressure is intensifying. The next support lies at the lower band, which conveniently overlaps with the previously mentioned FVG demand zone.
Moreover, the Average Directional Index (ADX) currently sits at a high 67.22, underscoring the strength of the ongoing downtrend. A rising ADX during a price drop is a clear sign that the bearish momentum remains dominant.
Reversal Possible, But Not Immediate
While Monero’s price correction has been severe, growing spot accumulation and bullish derivatives activity hint at the potential for a rebound. However, with strong technical signals indicating further downside, a swift recovery is unlikely. Investors may need to brace for more volatility before XMR stabilizes and potentially resumes its upward trajectory.