Last year offered a bullish ride for the top 10 cryptocurrencies as their time series chart showed successive higher lows. The privacy coin Monero (XMR) was not left out of the action as the pair offered investors, speculators and enthusiast alike an opportunity to cash in on the ride. Join me as we analyze the technical price setups that lead to the major moves of the pair and projection into the not too far future.
Technical Analysis of Monero XMRUSD November 2018
XMRUSD: Monthly Chart
A bearish accumulation pattern formed last year March indicated the activities of sellers in the market. As the adoption rate increase and the cryptocurrency started attracting more high volume investment capital, the bulls broke the pair out of the bearish accumulation pattern, causing the price to skyrocket for another 5 months making a move of about 663.53% compared to a 60.0% risk exposure.
After the breakout of bearish accumulation, a bullish accumulation pattern was fired on April of the same year, and price did not close below the months low which is the support level in this case. Price continued in a bullish direction even up until November where price again breaks out of another bearish accumulation pattern making a 188.00% gain compared to a similar 60.0% risk December last year, which was later followed by a bearish inside bar pattern in January 2018.
Other than the bullish closing inside bar on April 2018, there’s been no major price action pattern until the month of July when bearish accumulation patterns get fired. This bearish price action pattern continued to establish 4-consecutive bearish accumulation patterns, which at this moment indicates where a lot of sellers have their orders gathered. This setup leaves a resistance level at 142.67, above which, the stop loss for a short-sell trade can be placed 41% risk to a 60% price projection.
XMRUSD: Weekly Chart
The weekly chart above gave an early entry into the bullish breakout of the bearish accumulation pattern on 13th November, which was later followed by a bullish accumulation pattern, projecting consecutive bullish closing candles. The maximal favorable excursion for a buy trade on such a pattern is about 311% compared to a potential risk of 45%.
At the beginning of the year from the same weekly perspective, we can clearly see an early double bearish accumulation which quickly indicted a concern for sellers to dominate the market and cause a decline in the exchange rate of the XMRUSD.
As time moved on, the pair entered into deep swing high and swing lows on 02 April and bearish accumulation on 14 May. A setup we consider of high probability is a bearish hidden divergence, which we consider to be building upon the current weekly chart. A dead cross of the MACD oscillator and the already formed breakdown of bullish accumulation confirms the huge bearish direction.
XMRUSD: Daily Chart
Looking at the daily chart above, bullish accumulation patterns are being formed at the end of a bullish run, which later fails to a bearish breakdown. These significant bearish breakdowns are triggered on 5th September, 15th September and 16th October.
XMRUSD: 4-HOUR Chart
From the above 4-hour chart, both bearish and bullish accumulation patterns are major determiners of trend reversal and continuation. On October 21, a breakdown of bullish accumulation was followed by a bearish accumulation pattern in the direction of the bearish trend retracement. The retracement ended by a breakout of bearish accumulation on October 23, making a 4.0% climb compared to a 2.0% risk. This bullish move was also concluded by a bearish breakdown pattern on October 24, pushing price through a couple of bullish accumulation patterns.
A bullish regular hidden divergence concludes the bearish trend by a golden cross of the MACD oscillator, in combination with a bullish accumulation and a breakout of bearish accumulation. You see, when a confluence of these patterns is formed, it often builds the confidence in riding through the trend.
XMRUSD: 2-HOUR Chart
The 2-hour chart also triggered a bullish regular divergence pattern in combination with a bullish accumulation pattern. Breakdown of bullish accumulation pattern was formed on the last day of the month of October, signaling a weakening of the bullish trend.
Conclusion and Projection
Prior to uploading this article, things happen really fast on the lower H4 and H2 time frames. A breakout of bearish accumulation pattern was triggered on November 3 making a 4.5% rise compared to a 2% risk exposure.
On the other hand, considering the 4-consecutive bearish accumulation pattern formed on the monthly chart, our long-term direction is still based off of the monthly chart with a low percentage of capital exposed. Still referencing our monthly chart analysis we expect the price chart to make a 60% decline, and a dead cross of the MACD oscillator on the weekly chart will confirm this bearish direction.