Monero is a decentralized privacy-centric protocol that keeps the senders’ and receivers’ information hidden during transactions. XMR is the native token of this network and is quite popular because of its wide use cases.
At the time of writing this post, XMR was trading around $131, below the previous short-term support of $135 but above the yearly low of $95. In the last four months, the Monero token has been consolidating between $135 and $175.
However, after the announcement of the FTX liquidity crisis, XMR has broken the support. Monero is trying to regain the previous support level. It is interesting to note that the Bollinger Bands are wide, suggesting volatility in the market.
Moreover, other technical indicators like MACD and RSI are still bearish that do not suggest any improvement in the momentum. XMR may find $135 (previous support level) as a strong resistance. Indeed, it might take a few more weeks to regain the previous consolidation range.
On the weekly chart, candlesticks have been forming in the lower range of the Bollinger Bands, which suggests a bearish momentum for the long term. This week, XMR has formed a green candle, which might suggest a short-term bullishness for a few weeks, but Bollinger bands lacks volatility.
Most technical indicators are bearish, which does not qualify Monero for long-term investment. If you believe in the use cases, you can accumulate XMR tokens. Still, many investors are worried about government regulations because Monero allows anonymous transactions, which is a threat to the world economy.
We think XMR is a risky investment, but you can set a short-term trade. However, if you want to invest for the long term, you have to wait for an ideal opportunity because if Monero breaks the support, it may turn bearish, and the next support could be around $90.
The next few weeks are vital for Monero because, for long-term sustenance, it needs to regain the previous support of $135 decisively. Otherwise, XMR might see another selling pressure in the first quarter of next year. However, the positive sign is that many cryptocurrencies have made a yearly low after the FTX liquidity crisis, but Monero is still in a good position above $95.