Market Overview
The cryptocurrency market has experienced significant volatility over the past 24 hours. This heightened activity follows the Federal Reserve's recent rate cut decision and a notable meeting between Donald Trump and Chinese President Xi Jinping. These events collectively contributed to approximately $813 million in total liquidations. Of this amount, $613 million stemmed from long positions, as both Bitcoin (BTC) and Ethereum (ETH) saw declines exceeding 3%. This downturn has placed additional pressure on major altcoins, including Monero (XMR).
Currently, XMR is trading in negative territory, testing a crucial support zone. The outcome of this test could be a determining factor in whether the privacy-focused token experiences a rebound or continues its downward trend.
Descending Broadening Wedge Pattern
Analysis of the 4-hour chart reveals that XMR is currently trading within a descending broadening wedge pattern. This formation is typically recognized as a bullish reversal pattern, often appearing during corrective downtrends. The structure signifies a market phase characterized by expanding volatility, but also a potential weakening of selling pressure. Such patterns frequently precede a trend reversal once buyers begin to regain market control.
Recently, XMR encountered resistance near the upper boundary of this wedge, around the $345.90 mark. This led to a subsequent pullback, with the price testing the lower trendline in the vicinity of $322. Encouragingly, buyers have begun to show signs of defending this level, as XMR is now trading near $328.11, positioned just above the established support line.
This particular price area has previously served as dynamic support on multiple occasions. Consequently, it represents a critical zone that bulls must successfully protect to maintain the integrity of the potential bullish reversal structure.
Future Outlook for XMR
Should buyers manage to successfully defend the lower boundary of the wedge and subsequently reclaim the 50-hour moving average, which is currently situated near $331.73, XMR could gain short-term momentum. This upward movement might propel the token towards the wedge's upper resistance area, estimated to be around $342.
A decisive breakout above the $342 level would serve as confirmation of a bullish continuation pattern. This scenario could potentially pave the way for a more robust recovery phase in the upcoming days.
Conversely, if XMR experiences a breakdown below the support trendline, it would indicate a bearish signal. Such a development would likely empower sellers, opening the possibility for deeper price declines.