Monero Braves Crypto Market Collapse With 10% XMR Price Rally – Now What?

The privacy-focused cryptocurrency Monero (XMR) rose nearly 9.5% in the past week compared to the crypto market’s 8.5% decline over the same period. In addition, the XMR/USD pair has broken above a strong multi-month resistance trendline, suggesting more upside potential.

XMR price promotion

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

Speculation about entities using Monero to evade sanctions could have increased its appeal among investors. Meanwhile, US 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 plan”.

“Due to the difficulties in tracking and tracing the individuals involved in privacy coin transactions,” Brookings explains.

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

Monero’s market cap has risen nearly 85% to $4.30 billion since February. While technical indicators suggest it could grow further in the second quarter.

XMR market cap since February. Source: CoinMarketCap

Technical breakthrough in the game

This week, XMR broke above a downward trendline that had capped its upward attempts since May 2021.

Interestingly enough, the trendline forms what appears to be a bull flag pattern, coupled with a parallel lower trendline acting as a support. A basic tenet of bull flags is that they send the price in the direction of the previous uptrend (called “flagpole”) after it has decisively broken up.

XMR/USD weekly price chart with bull flag breakout. Source: TradingView

As a rule, the bull flag’s upward target is usually the sum of the breakout point and the height of the flagpole. That puts XMR on its way to nearly $480, up nearly 110% from its current price near $235.

Longer-term, however, independent market analyst Don Yakka argues that XMR price can go up to $10,000 if a classic “cup-and-handle” pattern plays out.

XMR/USD daily price chart with heads and handles pattern. Source: Don Yakka/TradingView

Cup-and-handles are bullish continuation patterns where the “cup” represents a U-shaped price trend, including a period of strong correction followed by an equally decisive recovery, and the “handle” resembles a consolidation indicator, such as a “flag” or a ‘pennant’.

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A head and handle pattern is resolved after the price breaks above the resistance level. The breakout target is measured after the maximum height of the pattern has been calculated and added to the breakout point.

Nevertheless, privacy currencies like Monero continue to face downside risks due to increasing regulatory pressure 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 Every investment and trading move involves risks, you should do your own research when making a decision.

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