Monero falls from FOMO to 63% freefall - Whats next for XMR?

Monero [XMR] had a parabolic rally in January, and just as it set a new all-time high at $798, Bitcoin [BTC] ran out of bullish momentum. The subsequent BTC sell-off led to a steep XMR correction of 63.7% in just 22 days.

The social media engagement on the privacy coin was remarkable, but AMBCrypto pointed out that this was a sign of “obvious crowd FOMO” and highlighted overheating alarms that the spot volume bubble map showed.

These warnings were followed by a steep correction just days later. The failure to defend the long-term trendline support meant that XMR was likely headed to $266 next. On Friday, the 6th of February, XMR reached a low of $276.

Monero bears reclaim key retracement levels

Source: XMR/USDT on TradingView

The A/D indicator made new multi-month lows to underline the depth of the selling pressure in the past three weeks. The steep correction and high volume explained the A/D indicators movement and showed that recovery was highly unlikely anytime soon.

The 20 and 50-day moving averages formed a bearish crossover after 4 months of a bullish trend. The DMI also signaled a strong downtrend in progress.

These were pretty obvious just looking at the recent drawdown.

What should traders expect？

Traders and investors should be prepared for the downtrend to continue.

It is possible that Monero would halt at certain price levels and form a range at moments when Bitcoin [BTC] and major altcoins see a price bounce in their longer-term downtrends.

XMR faces bearish retest zones

Source: CoinGlass

The run is clearly over. A Bitcoin bounce could take XMR higher. The liquidation heatmap showed that the $390-$420 and $500 levels were the next magnetic zones to watch. A retest of these areas could yield another bearish move.

Final Thoughts