Monero (XMR) Defends Key $500 Support After Sharp 27% Correction

On January 23, Monero (XMR) fell back after a sharp early-year surge that lifted its price from the $400–$500 zone to above $800 within a few days. The breakout has created a lot of attention in the privacy-coin market. Traders are now focusing on moderate support as the momentum lags.

The surge did not continue. The market declined and entered a controlled retracement phase. Monero returned some of its gains without a widespread collapse. The fall imposed unrealistic pressure in the short term and left traders struggling to reevaluate the trend.

At the time of writing, XMR is trading at $521, as per the CoinMarketCap data. The daily growth is 2.84%, and the weekly decline is 27.16%. The trading volume decreased by 35.02% to $104.1 million in a clear indication that there was less participation after a spike in early months.

Source: CoinMarketCap

Monero Enters Price Discovery With Eyes on a $750 Retest

Analyst CryptoPulse highlighted that Monero has entered the price discovery process for higher timeframes. He indicated that the former all-time high has reversed into support. 

He stated that the trend is capable of rising further as long as this level persists. He included that there is still a chance of a retest of $750+ when there is a regaining of control of buyers.

Source: X

Moreover, another analyst, AltCryptoGems, mentioned the decline from the $800 high to the 2021 all-time high, which is around $500. He referred to this zone as a cooling area. The analyst stated that maintaining a higher price would help support the overall market structure. A drop below this area would make the cryptocurrency weak.

Source: X

Also Read: Monero (XMR) Rally Extends Above $700 as Bulls Eye $1,000

Trading Volume Drops as Derivatives Activity Cools

According to CoinGlass data, the trading volume has decreased by 37.98% to $345.19 million. Open interest decreased by 2.60% at $212.05 million. The OI-Weighted Funding Rate is neutral at 0.0131%.

Source: CoinGlass

Bands Narrow While EMAs Show Strong Support Structure

The Bollinger Bands show narrow conditional forms. The highest band is 721.33, middle band is 541.16 and lowest band is 360.99. The contractionary indicators would have minimized volatility as Monero is narrowing following the January spurt.

The EMA 20 is at 538.58. It manifests itself in the periphery and it is a short-term cooling of the rally. Price has been sensitive at this point and traders are seeking a way forward.

The EMA 50 is at 487.48. It is also kept beneath the market and under the broader structure. The price continues to trade above this band and this is a sign of a trend strength.

Source: TradingView

The EMA 100 is 435.85, although the EMA 200 is 381.04. Both indicators stayed the same during the retracing. They confirm of high medium and long-term support and it proves that the basis structure is not removed.

Monero is trading above one of its support zones around 500. The region is significant to hold as its collapse would bring the momentum down. Recovery at the current level or higher will open up upside targets and past highs will be in view again.

Also Read: Celestia (TIA) Breakout Alert: Inverted H&S Pattern Set to Skyrocket to $0.78?