This is a market that I think will face quite a bit of headwind, because we are simply not in the right economic cycle for crypto to do well on the whole.
Monero has been very bullish during the trading session on Tuesday to reach towards the $180 level. This is an area that is worth noting because it has previously been both support and resistance. We also have the 50 day EMA sitting there and sloping lower, so that has a bit of technical resistance built into it anyway. Monero has formed a “W pattern”, but we have yet to break out of it. It is because of this that I am watching Monero very closely.
Looking at the chart, we are still very much in a downtrend, so it is likely that we are going to see sellers coming back in given enough time. After all, we have seen a bit of a knock-on effect over here due to what has been going on in Bitcoin, which has been greatly influenced by the idea of rubles flowing out of the cryptocurrency markets. With sanctions, these types of things typically happen. We have already seen this in Venezuela and North Korea.
Whether or not that is sustainable is a completely different question, and I do think it is probably more or less going to be a bit of a market just waiting to be shorted, but whether or not that comes to fruition remains to be seen. The 200 day EMA sits at the $214 level and is sloping lower as well. That is roughly where the “measured move” should go to if we break out above the top of the W pattern, so it all ties together quite nicely. Regardless, this is a market that I think will face quite a bit of headwind, because we are simply not in the right economic cycle for crypto to do well on the whole.
On the downside, the $150 level is a significant amount of support, extending down to the $140 level. If we were to break down below there, the market is very likely to go much lower to perhaps the $100 level. That obviously would be a significant move lower, but I think that the volatility and the geopolitical concerns out there will continue to keep these markets moving quite drastically overall, not just Monero, but everything else as well. While crypto traders tend to think that crypto is completely insulated, it most certainly is not as we have seen over the last several months.
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