Here’s the ‘but’ of Monero [XMR] chalking up a bearish pattern

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

• Monero (XMR) was bearish on the daily chart
• The elevated positive sentiment over the weekend has flattened out

Monero (XMR) bulls were cut to size over the weekend as bears threw a massive party. This was evidenced by the bearish engulfing pattern (A tiny green candle followed by a larger red candle) on the charts. It indicates that the bears will lower the prices soon. 

Read Monero’s [XMR] Price Prediction 2023-24

The bulls tried to regain control on Monday, pushing XMR’s price above $135.2. However, the bears furiously neutralized their efforts and pushed the price lower, as shown by the Shooting Star (red candlestick with a long tail).  

The recent price action has formed a bearish pennant pattern. Should a bearish breakout occur, XMR could see a deep plunge towards $104.1.

XMR falls below its 3-month trading range

Source: XMR/USDT, TradingView

After a false bearish breakout from a bearish pennant pattern in June, XMR posted a rally leading to the ATH of $174.2 in August. Since mid-July, XMR has been confined to a range of $135.2 to $167.5, with $154.1 as the midpoint.  

On 9 November, XMR fell below this range and shifted to a bearish market structure. The Relative Strength Index (RSI) was at 39, below the neutral level of 50 and the On Balance Volume (OBV) has been steady for about a month. These indicators, thus, support the bearish market structure.  

Therefore, a breakout to the downside could transpire, dropping the altcoin to $104.1 in the long term.  

However, the bearish pennant is similar to the line formed in June (blue lines). So, if history repeats itself, XMR could see a false bearish breakout before rallying to the mid-range at $151.4 in the long term. This would invalidate the bearish bias. 

Neutral sentiment could undermine upside price action as development activity rebounds

Source: Santiment

According to Santiment, the elevated weighted positive sentiment seen over the weekend has levelled off. The elevated sentiment corresponded with an increase in development activity on the Monero network.  

A decline in development activity was later reflected in a reduction in positive sentiment. There was a slight increase in development activity at press time, despite the neutral sentiment. Interestingly, there was also a slight increase in price movement.  

Long-term investors should therefore track the network’s development activity to assess its viability and ability to attract other long-term players.