Key Takeaways:
- Monero prices eye an impressive 57% boost in prices if the token breaks out of a bullish technical pattern.
- However, a death cross between XMR's MA lines might spark a sell-off.
NEW DELHI (CoinChapter.com) — Monero (XMR) exhausted its six-day downtrend on Jun 6, with its prices jumping 4.4% to $195.60.
However, XMR price action remained range-bound between $174 and $202, indicating that investors continue to remain cautious of the crypto market following the bloodbath in May.
Furthermore, the privacy-centered crypto might be eyeing gains as XMR prices are moving in a bullish technical pattern called the ascending triangle. A horizontal trendline connecting swing highs and an ascending trendline connecting swing lows form an ascending triangle pattern.
Volume helps determine if the breakout is strong.
In an ideal world, buyers would enter the market as the trendlines close the gap, pushing XMR prices above horizontal resistance with heavy volumes. Unfortunately, a breakout on the upside with low volume is very likely to fail and pull back prices.
If the pattern holds, Monero prices might reach $304, a jump of nearly 57% from current prices. On the other hand, if the altcoin’s prices fail to stage a breakout and Monero falls below the lower trendline of the triangle, XMR might fall to support between $133 and $125.
Also Read: Monero (XMR) could shed 20% on roaring rising wedge fears.
As a result, a fakeout might see Monero fall between 31.4% and 35.5% from XMR prices’ current levels. Veteran investor Tom Bulkowski believes ascending triangles are a “decent performer after an upward breakout,” with prices breaking upwards nearly 64% of the time.
However, the investor also noted that a downward breakout results in the pattern suffering from a pullback rate of 63%.
Death Cross Might Hurt XMR Price Action
Meanwhile, XMR price action has led its 50-day moving average (50-day MA, blue wave) to move below its 100-day MA (purple wave), forming a bearish pattern called the death cross.
In detail, a death cross forms when a token’s short-term moving average trendline moves below a relative long-term moving average. Traders believe the technical pattern signals negative sentiment and weakness.
The death cross often indicates the onset of bearish price action, resulting in significant selling pressure.
Moreover, the trend-based momentum oscillator MACD remains bullish for the XMR token. But, positive bars on the MACD histogram have started contracting, indicating the MACD line (difference between 12-day and 26-day EMA) might be moving towards the MACD signal line (9-day EMA of MACD).
The indicator might soon chart a bearish crossover between the MACD and signal lines.
The death cross and the impending MACD bearish crossover might force XMR prices to test support near the token’s 20-day MA (red wave) at $184.4. If Monero prices break below the immediate support level, XMR could fall to support near $163.
Also Read: Monero faces downside risks after jumping nearly 77% in two weeks.
Finally, a marketwide sell-off could see the XMR token fall to $144 before recovering.
Conversely, if XMR prices continue to move upwards, Monero would first face the 50-day MA (blue wave) and 100-day MA (purple wave) resistance confluence near $202. A move above the resistance confluence would give XMR momentum to target resistance near $221.8.
A sustained uptrend could push XMR to challenge resistance near $254 before corrections pare prices.
At the time of writing, XMR was trading at $194, up 3.35 on the day.
