Just like most other alts in the market, Monero too saw a decent rally over the past week. Apart from the broader market sustaining its uptrend, however, another critical factor had a role to play this time. The BTC-XMR atomic swap went live on Monero’s mainnet a few days back.
Atomic swaps allow users to swap or exchange their cryptos without the involvement of third parties in a completely decentralized manner. Already the leading “privacy coin” in the crypto-space, Monero has now become a little more private.
Impact on price
Right after the swaps went live on the network, Monero’s valuation started increasing. In fact, at the time of writing, XMR’s valuation was heading towards a two-month high. Now, as can be seen from the attached chart, the token’s price dunked below the 200-day SMA in the period between 17-19 August. However, the trend managed to reverse itself after the 20th. Since then, the price has remained above it.
Notably, Monero faces two mild resistances $295.26 and $309.78 at this stage. If these levels are successfully breached within the next few hours, XMR’s valuation has the potential to cross $350 by the end of this month.
Do the metrics support a rally?
In all likelihood, yes. The current volatility level (0.63), for starters, just seems to be perfect to sustain Monero’s rally. High volatility usually corresponds to a dramatic price swing in both directions, but mild volatility levels tend to aid long-term rallies. Interestingly, when the volatility of Monero dipped from 0.78 to 0.6 last month, its price ended up surging by about 13%.
The transaction count too, for that matter, has risen massively in the macro framework. Between June and July, the number of transactions used to revolve in the 13k-20k range. However, the same crossed 30k quite a few times in August. As far as this alt is concerned, the increase in transaction count has always coincided with its price rise. Ergo, this is another positive sign.
The trading volume too depicted a similar trend. On 20 August, Monero’s real volume stood at its one-month high ($114 million). A rise in volume doesn’t always guarantee that market participants are buying the token. However, the rise in circulating supply confirms the same this time.
Source: Messari
As per Messari’s data, Monero’s circulating supply witnessed a steep spike from $4.5 billion to $5.1 billion in just a matter of two days. Its current levels, again, are at their one-month peak. Ergo, it can be inferred that more tokens are circulating among market participants at this stage.
Furthermore, the social sentiment too remains strong at this point. The number of Reddit subscribers, for instance, has been gradually increasing on a daily basis. This ultimately means that the rally is backed by Monero’s community. A strong social sentiment is an added advantage on any given day.
What to expect going forward?
Looking at the state of all the aforementioned metrics and the trend on the price chart, it can be said that current market conditions are typically in the mood to welcome Monero’s price rally. After consolidating for weeks, in the $200 bracket, it is finally time to expect Monero’s valuation to cross $300 and maybe, $350.