MON's rebound dilemma: a cooling signal behind the technical breakthrough

Monad (MON) has declined by -11.21% in the past 7 days, with the current price around $0.02. This stands in stark contrast to the previous 29% increase, exposing the multiple pressures faced by this rebound—technically it seems to have broken through, but funding and derivatives positions are quietly retreating.

The technical breakout is real, but the volume story doesn’t add up

MON did indeed break through the neckline of the inverse head and shoulders pattern, overcoming resistance dominated by selling pressure. At that moment on December 24, everything seemed in place. But recent long upper shadows reveal a clue: sellers are continuously trying to push the price down from high levels.

At this point, looking at the Chaikin Money Flow (CMF) becomes even clearer. CMF measures whether large funds are truly supporting this rally, but it did not break above zero during the breakout. Now, CMF continues to decline while the price is still rising—an inconsistent signal. The last time CMF failed to break above zero was on December 11, after which the price quickly fell.

Spot selling pressure is accumulating, which is not a good sign

Since December 22, the net flow of spot exchanges has reversed. It shifted from an outflow of over $1 million to an inflow of about $2 million. What does this usually indicate? Arbitrageurs and early profit-takers are offloading.

When a technical breakout lacks CMF support and spot buying pressure turns into selling pressure, signs of weakness become hard to ignore.

Derivatives longs are rapidly retreating

If the spot market is still hesitant, the derivatives market is clearly voting with its positions.

Over the past week, smart money has been piling up long positions in perpetual contracts, with longs surging by 99%, reaching $89.36 million, perfectly aligning with the inverse head and shoulders pattern breakout on December 24-25. It was this bullish force that pushed MON above the neckline.

But in the last 24 hours, the story has reversed. Smart money’s long positions have dropped sharply by over 12.23%, and the top 100 perpetual addresses have cut positions by more than 216%. Public figures who usually follow the trend are also reducing their holdings, with a decline of nearly 28.78%.

This collapse of bullish consensus often indicates that the strong breakout has weakened. The price may not reverse immediately, but market unity has already dissipated.

Next 24 hours, MON faces a critical choice

Upward route: If MON can hold above $0.024, there is still a chance to attempt further gains. Closing above $0.026 on the 12-hour chart would confirm an extension of about 14%, targeting $0.030. Only by breaking through this zone can it truly escape the persistent suppression from sellers in the inverse head and shoulders pattern.

Downside plan: If the rebound weakens, $0.021 is the first line of defense. Falling below $0.018 will severely weaken the breakout structure. Closing below $0.016 would declare the breakout of the inverse head and shoulders pattern failed, and the price might retest the mid-December lows.

Currently, MON’s price is caught between a genuine breakout mechanism and short-term pressure. CMF is reluctant to confirm, spot flows hint at profit-taking, and longs in derivatives are retreating. Whether this level can hold will determine if this rebound is a fleeting moment or the start of a true trend.