2024-12-9 18:30 |
Monero has recently experienced volatile price movements, as observed in a detailed analysis of the XMR chart. Crypto analyst Chimp of the North explained why this price movement is happening – basically, some traders with too much leverage need to get cleared out before the price can start recovering.
Monero’s price had been climbing steadily until it shot up to around $220. Then it quickly dropped back down to between $195 and $200. This sudden movement indicates strong selling pressure and potential liquidation of overleveraged long positions. Analysts suggest this type of volatility is common when market participants hold excessive leverage, which can destabilize price action during corrections.
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Following the sharp drop, XMR’s price stabilized within the $195-$200 range, signaling the emergence of a possible support zone. Resistance remains at the $220 level, where the market faced rejection during the upward movement.
Funding Rates Reflect Leveraged Market ConditionsThe chart also shows aggregated and predicted funding rates for XMR perpetual swaps, which provide insight into trader sentiment. Before the price drop, the aggregated funding rate spiked, suggesting that many traders were holding highly leveraged long positions. These funding rates often increase in overheated markets, signaling an eventual correction.
Image Source: X/ChimpoftheNorthThe predicted funding rate displayed a lower value than the actual rate, hinting at market participants expecting reduced funding pressures following the liquidation of leveraged positions. Such a reset often creates conditions for more stable price movements.
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Monero’s Path ForwardWith the market appearing to stabilize, analysts anticipate a consolidation phase near $195-$200. If buying interest returns and funding rates normalize, XMR’s price could see upward momentum. However, failure to hold the support zone could expose the cryptocurrency to further declines, testing lower levels of support.
This development underscores the challenges of leveraging in volatile markets and the potential for price recovery after such corrections.
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The post Monero (XMR) Price Poised for Gains Once Overleveraged Apes Are Out of the Way – Analyst Explains appeared first on CaptainAltcoin.
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