Monero has been under intense selling pressure over the past month, with its price plummeting nearly 60% in just four weeks. The sharp decline erased weeks of gains and sent XMR into a sustained downtrend.
The move signals a sharp decline in investor confidence, as long-term holders and short-term traders alike reduce exposure amid widespread market stress.
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Monero traders withdraw
Derivatives data shows a clear exodus of traders from Monero. Open interest plummeted, dropping from about $279 million in mid-January to about $118 million. This 57% decline reflects a decline in participation across the futures market and indicates waning speculative interest in XMR.
This reduction is mainly explained by two factors. First, there was profit-taking after the previous price spike. Second, bearish market conditions eroded trader confidence as participants exited positions and liquidity thinned.
Declining engagement often weakens price support, increasing sensitivity to further selling pressure and volatility.
Despite the decline in participation, short-term momentum indicators suggest selling pressure may be easing. The Money Flow Index is forming a bullish divergence against the XMR price. Prices continue to make new lows, but MFI prices have made new lows, suggesting a decline in downward momentum.
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This divergence indicates that sellers are losing power, even though prices have not yet reacted. Historically, such setups have sometimes preceded stabilization or short-term recovery.
While not guaranteeing a reversal, this signal suggests that XMR may be able to avoid significant losses in the near term if demand stabilizes.
XMR price recovery may be slow
XMR price is slowly trying to recover, but lacks strong bullish confirmation. At the time of writing, Monero is trading around $326, just below the $335 resistance. Prices are still locked in a nearly four-week downtrend, with limited upside potential at this point.
In the current situation, it seems difficult to exceed $335. The next major resistance level is near $357, which could limit any recovery attempts. Barring new capital inflows or improved sentiment, XMR is likely to consolidate within this range as buyers and sellers remain cautious.
If bearish momentum strengthens, downside risk remains. If the 200-day EMA rises above the 50-day EMA, a potential death cross could form. Such signals often indicate long-term weakness. Under this scenario, XMR could fall below $291 and fall towards below $265, potentially widening the decline.
