XMR Price Prediction: Monero Doubles Its Price – Is It Due for a Strong Correction?

This eye-popping performance has propelled the token’s market cap above $7 billion and it is now ranked as the 23rd most valuable cryptocurrency as per CoinMarketCap.

In addition, Monero is among the biggest gains today with 24-hour gains of 11.6%.

But, why exactly is XMR rallying and can this incredible surge keep going?

A report from Bitfinex highlights some of the drivers behind this latest uptick.

“The renewed momentum for Monero and Zcash may be attributed to increasing concerns over digital privacy and the desire for confidential transactions,” the report emphasized.

Analysts highlighted that central banks are increasingly pushing for stronger regulations for the crypto space including enforced Know-Your-Customer protocols and anti-money-laundering policies (AMLs).

This has driven deep-pocketed investors to privacy tokens like Monero and Zcash, both of which obscure their digital footprint.

The report also emphasized that top centralized exchanges like Binance and Coinbase have refused to list XMR again as it continues to draw regulatory scrutiny. In addition, its design makes it almost impossible for these institutions to track fund flows in case of hacks and crypto heists.

XMR Extends 86% Above its Yearly PoC

The token was delisted from Kraken in Europe in October last year, just a few months after Binance did the same.

XMR’s resurgence may also be fueled by the belief that these top exchanges could relist it as its demand keeps rising.

Data from CoinMarketCap indicates that KuCoin and HTX handle the majority of Monero’s spot volumes.

The daily chart shows how stretched XMR’s rally is as the token has surged nearly 86% above its point of control (PoC) for the past year.

The rally may have been exacerbated by a short squeeze. On April 27, more than $1 million short positions worth of XMR were wiped out while another $500,000 worth of shorts were flushed out just two days ago.

Short sellers may have abstained from betting against the token lately amid its furious rally and that has probably resulted in significant price imbalances.

However, XMR has reached extreme levels in momentum readings that emphasize the need for a strong correction in the near term.

The Relative Strength Index (RSI) currently sits at 90 while the MACD’s histogram has not posted a negative reading in more than a month.

Despite the rally, XMR is still 21.6% away from its all-time high. Hence, this may not necessarily be the end of XMR’s uptick, even if it pulls back strongly in the next few weeks as the market has some charted territory to run to still.

Key Areas to Watch for a Late Entry

At a point when Bitcoin is making new highs, betting against a rally may not be the best idea. Hence, looking for support areas from which traders can enter long positions can be the best approach.

In the case of XMR, the first support to watch is the former higher high, which sits at around $350. Since this is also a psychological threshold as it is a second-tier round number, it is the most relevant area to watch in case of a pullback.

Other than that, the 21-day and 50-day exponential moving averages (EMAs) could also cushion any upcoming corrections.

To sum up, as the rally seems heavily stretched, this may not be the best time for a late entry. However, it also seems inconvenient to bet against the trend, especially when market sentiment has shifted.

Hence, a late entry at a key support may be the best way to benefit from XMR if the price action supports the continuation of its latest rally.