The Monero market initially rallied to reach the $180 level, where we have seen quite a bit of resistance previously, just as the area has been supportive. Ultimately, this is a market that I think will continue to see a lot of noise, especially as risk appetite has been all but eviscerated. It is interesting that we ended up giving back the gains we had, and in the way we had. After all, forming a shooting star after a short-term bounce suggests that we are going to have longer-term downward pressure.
If we break down below the bottom of the candlestick for the trading session on Friday, it opens up the possibility of a move down to the $150 level. The $150 level is a large, round, psychologically significant figure that has seen a lot of action previously. If we break down below there, then Monero will start falling rapidly to reach the $120 level.
As with all altcoins, unless we get some type of risk appetite out there, it is difficult to imagine that Monero will make any real traction to the upside. That being said, you should keep an eye on the Federal Reserve and what is going to do about monetary policy. If it continues to remain very hawkish, risk appetite-based products like Monero will get smoked. After all, Monero has no real use at this moment, so any buying of this coin has simply been the “greater fool theory” played out.
If Monero were to break above the $180 level, that is possible that we could go looking to the 50-day EMA, perhaps even the $210 level. That being said, it seems very unlikely, especially after the day that we had on Friday. I think we have quite a bit further to go, so I will look at short-term rallies as a potential opportunity to start shorting. The Monero market has been sold off quite viciously over the last couple of months, so I think we have plenty of people out there looking to short going forward. Expect a lot of volatility, as the market will continue to get influenced by the trouble that the market seems to have in general when it comes to hanging onto risk appetite. Ultimately, I believe that the sellers are still firmly in control.