Disclaimer: The findings of the following analysis is the sole opinion of the writer and should not be taken as investment advice
A dropping Bitcoin market has caused the value of the remaining cryptos to also witness a tremendous fall. The privacy-centric coin, Monero had already run into trouble with the exchange’s delisting it due to regulatory concerns and now has been witnessing a price fall.
The price of the crypto asset had been noting a downward trend due to the delisting, but this trend was accelerated by the falling BTC market. The daily chart has been witnessing sharp wicks for the day with the highest point being at $190.77, while the lowest was at $126.69. At the time of writing, XMR was trading at $150.71.
Monero one-day chart
Source: XMRUSD on TradingView
The above chart indicated the sharp surge in the price that was witnessed yesterday and an immediate correction followed today. The price level for the surge and fall has been similar, but this has changed the trend in the market.
Traders can use the current market trend to short the digital asset as bearishness seeps in.
Reasoning
With yesterday’s boost in price, the relative strength index was pushed to the overbought zone. A correction has now pushed the indicator into the equilibrium zone, wherein the buying and the selling pressure are equalized. As the buyers and sellers continued to trade the asset, the volatility in the market has grown.
The divergence of the Bollinger Bands indicated the rise in volatility, while the signal line was surging over the candlesticks, indicating a change in price trend. Although the buyers were pushing for the purchase of the digital asset, the Awesome Oscillator noted the lack of momentum in the market to keep the buying trend alive.
Important levels
Entry: $2.75
Stop-Loss: $2.8168
Take-Profit: $2.6189
Risk-to-Reward: 1.96
Conclusion
The current market provided an opportunity in the long term for the traders to short the asset, as the support has been the most tested price level over the past week. Although the buyers and sellers are head-to-head, the overall bearishness in the market was evident.