Monero is forming a head and shoulders pattern on its 4-hour time frame and is starting to complete the right shoulder. A break below the neckline around $225 could lead to a selloff of the same height as the chart pattern, which spans $225 to $375.
However, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. This means that the uptrend still has a chance at resuming. If the neckline keeps losses in check, XMR/USD could still bounce to the $300 area around the moving averages.
Note that the gap between the moving averages is narrowing to signal a slowdown in buying pressure. If a downward crossover materializes, price could still have a shot at breaking support and sustaining the drop.
Stochastic is pulling up from oversold conditions, though, so buyers could regain the upper hand at some point. RSI is already on the move up to signal that sellers are taking a break and could let bulls take over.
The dollar has been on weak footing following Trump’s decision to fire Tillerson, leading to speculations of more protectionist policies and a potential trade war. The US President also emphasized his plans to impose higher tariffs on China in order to protect US companies.
By the looks of it, cryptocurrencies are taking their cue from higher-yielding assets such as stocks and commodities. In other words, a selloff in these riskier assets also tends to drag altcoins like Monero along.
News agencies are reporting that unwitting digital asset holders are being targeted to generate money for cybercriminals. In particular, the cryptocurrency being used is Monero so this could weigh on confidence in this specific altcoin as the “cryptojacking” goes on.
Vancouver-based Jerome Segura, a security researcher with software company Malwarebytes, noted:
“It’s platform agnostic in the sense that it doesn’t matter if you have a Windows computer, or a Mac, or even a mobile device, if you’re visiting that website your device will start mining regardless.”
US retail sales and PPI reports are up for release and could impact USD action against Monero, but it’s likely that sentiment will be the main driver.