Monero (XMR) adjustment after ATH: Risk warning and investment opportunities

Monero (XMR) experienced a surge in trading volume in mid-January, reaching a new all-time high of $799.89. However, since then, the XMR price has corrected downward by 43.8%.

A recent report from Coinphoton predicts that XMR may continue to adjust to price levels of $520 and $400-$440. The reality has unfolded exactly as forecasted, and currently, this cryptocurrency is supported at an important price zone.

Is the long-term trend of XMR currently bullish or bearish?

Since August, XMR has undergone a strong rally, reaching a new all-time high. However, most of that growth has been erased by the recent correction. The pivot points on the chart are identified based on significant fluctuations on the weekly timeframe.

Source: TradingView Observing on the daily timeframe, the oscillation structure has not been completely broken yet, although signs of a bearish reversal have appeared internally. The CMF indicator is below the -0.05 threshold, and the RSI has also fallen below the neutral level of 50. XMR is currently trading below both the 20-day and 50-day moving averages, indicating that selling pressure still dominates and the risk of further correction is quite high.

Bearish scenario analysis

In the context of Bitcoin (BTC) facing selling pressure and XMR testing an important Fibonacci support zone, the short-term outlook for XMR is not very promising for buyers. The recent rally to the ATH shows signs of a blow-off top with a spike in trading volume.

If the XMR price drops below $411.5, the downtrend will be confirmed on the daily timeframe. Currently, the argument for establishing a new peak no longer has a solid basis.

Action for traders: Sell on rebound

After attracting significant liquidity around the $450-$480 zone, XMR experienced a slight recovery on January 26. This rebound could lead to attractive price levels above, specifically $500-$510 and $560-$580. In the coming days, a rebound to these levels is entirely possible.

Source: CoinGlass Traders should pay attention to the $411.5 level. If the price drops below this, the long-term downtrend will be reinforced. Conversely, if the price rebounds to the liquidity zones above, it could be an opportunity to observe XMR’s potential reversal to an uptrend.