Monero prices were once above $500. In fact prices touched $531before crashing like a sand castle in the following weeks. Currently, more than $200 has been shed and with the way the chart is set up, more sell pressure is expected.
Of course, this is a blessing in disguise for bulls as every dip is a buying opportunity. From the chart, we can see a clear stochastic sell signal turning from deep the overbought territory.
That’s not enough. Last week ended up as a doji and like the week before, closed above the upper BB. So here we have two weekly and over-valued candlesticks with a sell signal in place screaming one thing: Sell.
In the daily chart, we can see that the middle BB is acting as a reliable resistance line coming two days after sellers broke and close below the 20 period MA on December 30.
Notice that before this important close below, price action had been moving above this line since November 6 when Monero surge up begun.
Anyhow, as typical of a break out strategy, a retest is essential and therefore with every Monero appreciation, sellers are finding favorable prices for shorting.
Besides, stochastics are bearish and should there be rejection of higher prices at the middle BB, then sellers should fine tune their entries in the 4HR chart.
From our entry chart, I shall be watching two levels relative to stochastics buy or sell signals. The first is how Monero prices react at the minor resistance trend line and the middle BB now that we have a strong stochastic buy signal.
If there is a surge and close above this minor resistance zone then we shall shift our attention to the all important $400 price tag. It is important because this is the second Fibonacci extension level in the weekly chart and is also the tops of December 22 bearish candlestick.
I expect Monero prices to react at $400 and should there be a stochastic sell signal at that level, then we sell and trade according to the weekly chart trend.