Business

Monero “Falling Wedge” Breakout Positions XMR Price For A 75% Rally

Monero (XMR) price fell nearly 10% three days after hitting a weekly high around $290 on April 24. Nonetheless, several technical indicators are suggesting that the XMR/USD pair is poised to continue its uptrend in the coming months.

Falling wedge eruption in progress

Notably, XMR’s price broke out of its “descending wedge” structure in late March. It continued its upward move in later daily sessions, with rising volumes suggesting bullish sentiment among Monero traders.

Traditional analysts view falling wedges as a bullish reversal pattern, ie the price initially consolidates within a contracting descending channel followed by a strong recovery to the upside.

Typically, the falling wedge breakout target approaches the length equal to the maximum distance between the pattern’s lower and upper trend lines.

blank
Weekly XMR/USD price chart with falling wedge breakout setup. Source: TradingView

The XMR’s falling wedge stretches to nearly $250. Meanwhile, the structure’s breakout point is around $210. As a result, the upside target for the Monero token is close to $470, up more than 75% from today’s price.

Still, XMR has yet to close above $300, a psychological resistance level, to confirm its move towards the falling key target.

Monero hard fork ahead

XMR’s bullish outlook also appears in the months leading up to Monero’s hard fork.

Notably, Monero will undergo an interim protocol upgrade in July ahead of a testnet deployment in May. The update aims to increase the ring size from 11 to 16 to ensure XMR transactions have a greater anonymity rate to make tracing the source of the transaction more difficult.

The hard fork announcement came amid rising demand for privacy coins amid geopolitical and economic turmoil.

blank
The top 10 privacy coins over the last seven days. Source: Messari

Short-term correction risks

XMR’s strong fundamentals support its bullish wedge setup. Nevertheless, Monero is also threatened with a retracement in the short term.

blank
XMR/USD daily chart. Source: TradingView

XMR has corrected lower after repeatedly testing $278 as resistance for the past three days, raising the possibility that it could continue lower. This would mean that the next downside target appears near $227, which coincides with the 0.236 Fib line of the Fibonacci retracement chart drawn from the $493 swing high to the $145 swing low.

Related: Monero’s crypto of choice as double ransomware attacks increase by 500%

Conversely, a decisive move above $278 could see XMR testing $320 – the 0.5 Fib line – as a preliminary upside target.

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.