Cryptocurrencies have suffered a harsh reversal this week. A few days after Bitcoin surged to an all-time high, cryptocurrencies have lost more than $300 billion of value. Monero price has not been spared as well. It has crashed to the lowest level since September 29th. By so doing, it has fallen by more than 21% from its highest level in October.
Why is XMR crashing?
For starters, Monero is a relatively popular cryptocurrency. Users love it because of its relatively faster speed than Bitcoin and the fact that it is highly secure. Unlike most cryptocurrencies, Monero cannot be tracked, which makes it popular among people who use the darkweb. It is also widely accepted in a number of online stores.
Monero’s security features stem from how it is built. The network relies on stealth addresses and ring signatures that hide the amount being sent and the addresses of the sender. This means tha it creates a new address for all transactions it handles, making it highly difficult to track.
However, Monero price has lagged that of key tokens over the years. This trend has seen its total market capitalization be passed by other cryptocurrencies like Filecoin and Internet Computer. Still, there is a likelihood that Monero will bounce back in the long term.
Monero price prediction
On the four-hour chart, we see that the XMR price found a strong resistance at $296 in the past 2 months. It struggled to move above this level in October and November. Since then, it has been in a major downward trend.
And this week, it managed to move below the key support level at $251. This is a place where the price had failed to move below recently as well. This is a sign that bears are solidly in control for now.
Another reason for this is that the price has moved to the lower side of the Bollinger Bands. Therefore, the path of the least resistance for the coin is to the downside.
However, there is a likelihood that a break and retest pattern will happen. This is where the price retests a key support or resistance and then resumes the prior trend. In this case, the prior support is at $250.