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Monero Eyes $200 Reversal Target After Hard Fork Delay
The privacy-focused cryptocurrency monero (XMR) has been dumping the last few days on the news developers have postponed a highly anticipated hard fork by six weeks.
As of writing, the world’s 11th largest cryptocurrency by market capitalization is trading at $258 – down 10 percent in the last 24 hours, according to data source CoinMarketCap.
A week ago, XMR was solidly bid around $380, reporting 90 percent gains over lows seen in February as investors seemingly bought with an intention of making free money via the “moneroV” hard fork, originally scheduled for March 15. However, on March 9 the developers announced a delay as requested by users, trading platforms and large mining pools.
Consequently, prices have dropped more than 30 percent in a week.
The hard fork is now scheduled to happen on April 30 at block 1564965 and the holders (at the time of the fork) will receive free moneroV tokens at a ratio of 10 to one.
Given the demand for free coins via forks, this could lead to positive growth a couple of weeks down the line. That said, the technical charts indicate $200 could be a potential bullish reversal point.
The above chart (prices as per Bitfinex) shows:
- The bears are in control following a 30 percent week-on-week drop.
- The momentums studies are biased bearish: The 5-day moving average (MA) and 10-day MA trend lower, indicating a bearish setup. Also, the 50-day MA has proved to be a strong resistance over the last three days.
- The relative strength index (RSI) is below 50.00, suggests scope for a further drop in XMR.
- Bullish cypher pattern: Point D ($199) is a bullish reversal point, meaning XRM could bid fresh bids around the key level and will likely rise to $268 (38.2 percent Fibonacci retracement of leg CD) and $310 (61.8 percent Fibonacci retracement of leg CD).
- XMR could drop to $200 over the next week – a bullish reversal point as per the cypher pattern rules. The cryptocurrency could then rise to $268 and possibly to $310 as discussed above. The scenario gels well with the idea of a pre-fork rally.
- However, Feb. 6 low of $150 could be put to test if the cryptocurrency finds acceptance below $200.
- On the higher side, only a close (as per UTC) above the 10-day MA would neutralize the bearish outlook and could yield short-term consolidation.
Further, XMR will likely have a tough time against bitcoin, the technical chart indicates. Currently, the XMR/BTC exchange rate is trading at BTC 0.027642 on Bitfinex.
XMR/BTC daily chart
- XMR breached the key rising trendline support (drawn from the Nov. 5 low and Dec.8 low) on Monday, signaling a long-term bullish-to-bearish trend change.
- The 50-day MA support has been breached as well. Further, the 5-day MA and 10-day MA are sloping downwards in favor of the bears.
- The RSI is biased bearish.
- XMR will likely test support at BTC 0.026 in the next 24-36 hours and could possibly extend the decline to BTC 0.023 (200-day MA).
- Only a close (as per UTC) above the ascending trendline would abort the bearish view.
Water osmosis via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Author: Omkar Godbole
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