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For nearly a week, Monero has been trading within the limits of a downward channel. As the price of XMR attempted to break north of its upper trendline, it appears that a larger market rise was the missing spark.
However, a certain conditions must be met before a blowout may be predicted. At the time of writing, XMR was trading at $306.16, up 6% in the previous 24 hours.
Monero 4-hour Chart
To be considered a successful breakout, XMR must close above its swing high of $317 set on August 27. The digital asset’s next target levels are between $340 and $344, signifying 3-month highs. If sellers enter before $317 and cause a sell-off, the price will remain within the pattern.
A closure below the 20-SMA (red) would also enhance the likelihood of a newer bottom of $271, from which the 200-SMA would be under scrutiny. A close below the long-term moving average line would result in significant losses.
The 24-hour trading volume increased by 23%, which appears to be necessary if XMR is to maintain its current trend. For a successful breakout from the pattern, the price must emphatically close above $317 on the strength of solid volumes. The RSI experienced its own breakout, shooting north from a descending wedge and pointing north from 60.
A reversal is unlikely until the index reaches overbought territory. Meanwhile, the MACD and the Squeeze Momentum Indicator both gave strong purchase signals. After a bullish crossover, the MACD moved above the half-line, while the SMI displayed a sequence of green bars above its equilibrium.
Monero appeared to be on track for an 11% surge towards the $340-$344 resistance zone. Volumes were increasing, and the indicators were pointing to a positive story.
However, XMR must close above $317 to confirm this result. As a result, traders should hold off on longing XMR until this critical development occurs.