Key Takeaways:
- Monero (XMR) seems poised to retrace 20%
- The 4-hourly chart depicts a bearing Rising Wedge Pattern for XMR
- Monero has surged 70% since May 12 amid a largely crashing crypto market
YEREVAN (CoinChapter.com) – Monero (XMR) could retrace 20% in the days to come. After an impressive rally that saw its price spike over 30% in seven days, the privacy-centric altcoin may see a forced correction.
Having crossed the $205 mark during the trading session on May 26, XMR shed 7% within hours to fall back under $200. At the time of writing, Monero exchanged hands for $189.82 per token, according to CoinMarketCap.
Moreover, the four-hour chart of the XMR/USD pair on TradingView indicates a Rising Wedg Pattern formation. Being a bearish pattern, it indicates that the price will follow a downtrend, pushing the price of Moreno further down.
Should XMR close the day’s session under the $190 mark, it would indicate that the bears are in control. To regain lost momentum, a support line above $205 seems vital for Monero. The low trading volumes and the Relative Strength Index (RSI) drop below 50 show that investors are cashing out on weekly profits.
XMR surged 70% since May 12 amid a largely crashing crypto market, giving large gains to investors who bought the dip. As a result of its impressive rally, Monero flipped Bitcoin Cash (BCH) to become the 24th largest crypto by market cap (around $3.5 billion).
Recommended: Monero faces downside risks after jumping nearly 77% in two weeks
Monero (XMR) ‘Tail Emission’ to launch soon
Monero could become attractive for miners by introducing its “Tail Emission” feature.
Planned years back, the feature will finally be available at the end of May 2022. According to a long Twitter thread by Monero, the new feature will prevent block rewards earned from mining from going to zero.
With each increase in mining difficulty, block rewards for miners decrease. This can result in block subsidies becoming zero altogether in the long run. As a result, miners will find it unproductive to mine on the network and lose interest in the project.
The large exodus of miners will, in turn, compromise the security of the network. Therefore, using Tail Emission, Monero will fix block rewards at 0.60.
“This makes Monero *disinflationary*, and unlike fiat or centralize cryptocurrencies, the supply is perfectly known, predictable, and able to be projected at any point in the future,”
the team explains.
In contrast, Bitcoin (BTC) has opted to distribute rewards in the long run from fees. Even if the block subsidy goes to 0, the BTC network hopes to function normally by rewarding miners from users’ transaction fees.
However, as Monero explains, the transaction fees in Bitcoin only account for 1% of the reward in each block. The other 99% is entirely composed of block subsidies that will eventually decline to 0 BTC.
That can hamper the overall security of the network if miners leave. In addition, increasing transaction fees on the Bitcoin network will also prove a disadvantage.
Meanwhile, Monero (XMR) will look to reclaim lost ground above $200 to prevent a further decline to $150.
