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Monero Braves Crypto Market Crash With 10% XMR Price Rally – What Next?

Privacy-focused cryptocurrency Monero (XMR) is up almost 9.5% over the past week, compared to an 8.5% decline in the crypto market over the same period. Additionally, the XMR/USD pair broke a strong multi-month resistance trend line, which indicates further upside potential.

XMR Price Action

The price of XMR fell a modest 0.87% on April 10 from its two-month high of $245 set a day earlier. However, the cryptocurrency outperformed its key rivals including Bitcoin (BTC) and Ether (ETH) on a weekly timeframe.

Speculations about companies using Monero to evade sanctions may have increased its appeal among investors. Meanwhile, American research group Brookings warned last month that Monero, the first in the line of privacy coins, “could be used as part of a sanctions evasion scheme.”

“As a result of the difficulties in tracking and tracing those involved in privacy coin transactions,” Brookings explained.

“The IRS has offered $625,000 in payments to those who can breach the privacy of Monero, Zcash and other such cryptocurrencies.”

Monero’s market cap is up nearly 85% since February to $4.30 billion. While technical indicators suggest it could continue growing in the second quarter.

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XMR market cap since February. Source: CoinMarketCap

Technical breakout in game

This week, XMR broke a down-sloping trendline that had limited its upside attempts since May 2021.

Interestingly, the trendline depicts what appears to be a bullish flag pattern, combined with a parallel lower trendline that serves as support. A basic tenet of bull flags is that they send price in the direction of its previous uptrend (referred to as the “flagpole”) after it has decisively broken out to the upside.

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Weekly XMR/USD price chart showing “bull flag” breakout. Source: TradingView

As a general rule, the bull flag up target is typically the sum of the breakout point and the height of the flagpole. With that, XMR is on its way to nearly $480, up nearly 110% from today’s price of nearly $235.

For longer periods, however, independent market analyst Don Yakka argued This XMR price could reach as high as $10,000 if a classic cup and handle pattern plays out.

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Daily XMR/USD price chart with cup and handle pattern. Source: Don Yakka/TradingView

Cup and handles are bullish continuation patterns, with the ‘cup’ representing a U-shaped price trend, including a period of sharp correction followed by an equally crucial recovery, and the ‘handle’ resembling a consolidation indicator, such as the ‘Cup’. B. a “flag”. ‘ or a ‘pennant’.

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A cup and handle pattern unravels after price breaks above its resistance level. The breakout target is measured after calculating the maximum height of the pattern and adding it to the breakout point.

Nonetheless, privacy coins like Monero continue to face downside risks due to increasing regulatory pressures from multiple governments around the world.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.