Monero is a great place to start a short position. [XMR] It might be a good choice, especially after the recent rally.
The altcoin enjoyed a solid bull run since its last local low and was showing signs that it was beginning to show weakness at press time.
Monero peaked at $152.80 in 20 July before falling to $146.30 as per its press time.
The recent top is 54% higher than the $96.50 it had on 18 June, and its lowest price in 2022 at that time was achieved on 18 Juni.
XMR’s latest price action suggests that the bulls are running out of strength. This observation was also made right above the 0.236 Fibonacci line of retracement, which maps from the top to the bottom of the bear market.
Source: TradingView
XMR’s price action crossed above the Fibonacci retracement line slightly before showing signs of momentum weakness. This occurred after the price action crossed above the Fibonacci retracement line slightly before showing signs of momentum weakness.
Despite the recent upside, the coin is not yet overbought. This means there might still be some wiggle room for the bulls before it enters into the Relative Strength Index’s (RSI) overbought zone.
This would only occur if there’s enough buying volume to drive the price higher.
Taunting bears
Well, XMR’s latest upside was backed by strong volume which reached its four-week peak in the last 24 hours of press time.
Monero’s volume growth and price performance were positive, but the whale supply remained unfavorable.
Source: Santiment
The supply of whales also increased slightly despite the strong uptick.
This is a sign that the whales aren’t yet confident enough in their ability to invest more money into the market. It also means that most price action was controlled primarily by the retail segment.
The retail market can support strong short-term price rallies but a bearish retracement is almost always served up if whales don’t provide enough support.
This is likely to be Monero’s current outcome. There is also the possibility of a significant reversal.
Hopes for a soft landing
Monero’s latest rally took place on the heels of strong development activity. It has just revealed the latest developments in its protocol upgrade, which will be released on 13 August.
We’re thrilled to announce that CLI “Fluorine Fermi” v0.18.0.0 is now available!https://t.co/tEt6YdjIxp
“This is a major release. A user, merchant, pool operator or exchange should run it to ensure they are prepared for the protocol upgrade scheduled for August 13.
— Monero (XMR) (@monero) July 20, 2022
The upgrade might help to cushion XMR from a sharp retracement.
Investors have something to be excited about, which might encourage them hold onto their XMR to enjoy more upside in near future.