Monero (XMR) experienced a substantial price rally, jumping 50% in just 24 hours due to significant liquidity inflows linked to a hacker’s activities. This surge, however, was followed by a 17% decline, highlighting the lack of sustainable market support for XMR at this time. Current market sentiment appears to be bearish, as several underlying fundamentals have weakened in the aftermath of this rapid price movement.
The recent spike in Monero’s price can be traced back to a suspicious wallet that transferred 3,520 Bitcoins, valued at approximately $330.7 million, into XMR. This influx of liquidity, facilitated through multiple exchanges, temporarily boosted the price. However, analysis from AMBCrypto indicates that this rally lacks solid backing from market fundamentals, suggesting that further declines could be on the horizon.
At present, the OI-weighted funding rate—a key measure of market sentiment—has plummeted to its lowest level of the year at -0.5757%. Such a drastic drop points to a lack of confidence among traders, who may be prepared to short the asset. High levels of sell contracts generally indicate that prices may decrease further, reinforcing concerns that the upward momentum from the recent rally may not last.
Technical indicators also support this bearish outlook. The Relative Strength Index (RSI) stands at 83.67, indicating that XMR may be overbought. Additionally, the Chaikin Money Flow (CMF) suggests a dominance of sellers, as its reading has dropped significantly in a short span.
Even though the CMF remains positive—which could hint at potential buying activity—the immediate future for XMR looks uncertain. With the current resistance level at $284.88 and the possibility of a decline to around $231.96, investors considering purchasing XMR at this time might experience significant losses in the near term. If XMR fails to hold this level, it could further retreat to lower support at $199.40.
Overall, the current market conditions do not favor an investment in Monero.