Monero Defies Crypto Market Downturn With 10% XMR Price Rise

Monero Defies Crypto Market Downturn With 10% XMR Price Rise

Privacy-focused cryptocurrency Monero (XMR) rallied nearly 9.5% last week compared to the cryptocurrency market’s 8.5% drop in the same period. Furthermore, the XMR/USD pair has broken out of a strong multi-month resistance trend line, which suggests that more upside possibilities lie ahead.

XMR Price Action

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

Speculation about entities using Monero to circumvent sanctions could have increased its attractiveness 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 scheme.”

“As a result of difficulties in tracking and tracing individuals involved in privacy coin transactions,” Brookings explained.

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

Monero’s market capitalization has risen nearly 85% to $4.3 billion since February. While the technical indicators suggest that it could grow more in the second quarter.

XMR market capitalization since February. Source: CoinMarketCap

Technical break in play

This week, XMR broke above a downward sloping trend line that had been capping its upside attempts since May 2021.

Interestingly, the trend line forms what appears to be a bull flag pattern, in combination with a parallel lower trend line acting as support. A basic principle of bull flags is that they send price in the direction of its previous uptrend (called a “flag pole”) after it breaks decisively higher.

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Monero Defies Crypto Market Downturn With 10% XMR Price Rise
XMR/USD weekly price chart showing the ‘bull flag’ breakdown. Source: TradingView

As a general rule of thumb, the bull flag target is usually the sum of the breakout point and the height of the flagpole. That puts XMR on track at almost $480, up nearly 110% from the current price of around $235.

However, on longer time frames, independent market analyst Don Yakka argues that the price of XMR could reach up to $10,000 if a classic “cup and handle” pattern develops.

Monero Defies Crypto Market Downturn With 10% XMR Price Rise
XMR/USD daily price chart with cup and handle pattern. Source: Don Yakka/TradingView

Cups and handles patterns are bullish continuation patterns in which 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”.

A cup and handle pattern resolves after price breaks above its resistance level. The breakout target is measured after calculating the maximum height of the pattern and adding it to the breakout point.

However, privacy coins like Monero continue to face downside risks due to mounting regulatory pressure from multiple governments around the world.

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