The Privacy-Focused Blockchain
Monero is a blockchain designed with a primary focus on maintaining anonymity, protecting the privacy of both senders and recipients of its coins. In addition to its privacy features, Monero operates similarly to other prominent cryptocurrencies, using a proof-of-work mechanism to manage XMR issuance and incentivize miners to add blocks to the blockchain.
In recent weeks, Monero (XMR) has performed exceptionally well, with the coin’s price increasing by over 20% since March 10. While there are optimistic projections for the coin’s future, it is essential for investors to proceed cautiously, as the broader economic environment remains unpredictable.
Although the cryptocurrency market regained stability following recent turmoil in the banking sector, there are concerns that the situation could worsen over the next few months due to the impact of aggressive interest rate hikes.
The World Bank has warned that global growth is likely to slow dramatically this year, driven by global policy tightening, worsening financial conditions, and continuing disruptions caused by Russia’s invasion of Ukraine.
Prominent investor Jeremy Grantham has also cautioned that the financial markets are experiencing the burst of a massive bubble, and the banking sector instability was only the beginning.
Strong Correlation with U.S. Stock Market
Jeremy Grantham believes that the U.S. stock market could experience substantial losses in the coming months, with a 27% decline being the best-case scenario and a potential drop exceeding 50% in the worst case.
The cryptocurrency market has shown a significant correlation with U.S. equities, meaning that downturns in the stock market are often mirrored by similar trends in crypto prices.
At the same time, the crypto industry is under intense regulatory scrutiny in the United States. According to ShapeShift CEO Erik Voorhees, the battle between the U.S. government and the crypto industry is just beginning.
The U.S. Securities and Exchange Commission (SEC) continues its efforts to bring cryptocurrency operators under the same regulatory framework that governs traditional securities, such as stocks and bonds.
The SEC has drafted proposals that could make it more difficult for hedge funds, private equity firms, and pension funds to engage with cryptocurrency-related businesses.
Bitcoin’s price has already begun to correct from its recent $31,000 range, and some analysts predict that it may fall toward $27,000 in the coming week.
Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, has expressed skepticism about Bitcoin’s potential, stating that it cannot serve as a reliable currency due to its volatility and the unwillingness of central banks to adopt it.
Given that Monero’s price often mirrors Bitcoin’s trends, if Bitcoin falls below the $28,000 level again, it could negatively affect Monero’s price.
Tehnička analiza Monera (XMR)
Since March 10, 2023, Monero (XMR) has risen from $132 to $166.39, with its current price sitting at $161.85. However, it may struggle to maintain a position above the $150 mark in the coming weeks. If the price breaks below this level, XMR could potentially test $140.
Key Support & Resistance Levels for XMR
The chart from July 2022 highlights critical support and resistance levels that can help traders anticipate price movements. Although Monero (XMR) has weakened from its recent highs, if it manages to break above the resistance at $180, the next target could be $200.
The key support level is at $150, and if this level is breached, it would trigger a “SELL” signal, opening the path for a drop toward $140. Should the price fall below $130, the next significant support level could be around the psychological barrier of $100.
Factors Favoring the Price Increase of Monero (XMR)
While the upward potential for Monero (XMR) might remain limited in the short term, if it surpasses the resistance at $180, the next price target could be $200.
Traders should keep in mind that Monero’s price is correlated with Bitcoin’s movements. If Bitcoin rises above the $35,000 mark, it could lead to a price increase for Monero as well.
Indicators Suggesting a Drop in Monero (XMR)
Currently priced above $160, Monero (XMR) may face a decline if it falls below the $155 threshold. This would likely lead to a test of the important support at $150.
The inherent volatility of cryptocurrencies could cause investors to sell Monero if negative news impacts the market, such as the collapse of a major bank heavily exposed to crypto or the bankruptcy of a significant crypto firm.
Insights from Experts and Analysts
Although Monero (XMR) has gained over 20% since March 10, the broader macroeconomic conditions remain uncertain.
Central banks continue to take aggressive measures to combat inflation by raising interest rates, and cryptocurrencies like Monero could be negatively affected by this tightening monetary policy.
The Federal Reserve is expected to increase rates by 25 basis points to a range of 5.00%-5.25% next month. Analysts are concerned that the Fed’s actions could lead to a recession, negatively impacting corporate earnings and stock markets.
Jeremy Grantham believes that the U.S. stock market could lose as much as 27% or more over the next few months. Given the high correlation between stock and crypto markets, a downturn in equities could lead to a significant drop in Monero (XMR)’s price.
Izjava o odricanju od odgovornosti: Cryptocurrencies are highly volatile and not suitable for all investors. Never invest money you cannot afford to lose. The information provided here is for educational purposes only and should not be considered as financial advice.
