Monero Analysis (XMR/USD) December 27, 2017

The path taken by DASH and Monero is almost identical. Both pairs are tracking the BTC and as such, any sudden appreciation especially in this crypto-pair should be taken with a grain of salt. Why? It isn’t hard to notice the over-extension and that bearish candlestick that clearly closed above the upper BB after last week close.

 Yes, indeed we are in a bullish trend even the middle BB shows that but knowing very well that moving averages are often lagging indicators, candle specific characteristics can be handy if you want to capture early trend reversals.

You see, the best thing about this potential reversal is the stochastic sell signal that has printed a sell signal and is turning from the overbought territory especially in relation to price. However, this should also be taken with caution.

DASH like other digital currencies are in my opinion considered assets that can be influenced heavily by company/founder related news. We shall keep it simple and watch where this pair will close this week otherwise we maintain a short term, bearish skew towards equilibrium.

We cannot ignore the influence of the 20 period MA in the daily chart. Notice how it has been effective in shoring prices? Even after that bear spike on December 22, prices still closed above it and prices continue to consistently close above the middle BB meaning despite all the bear pressure, there is some degree of buyers pumping DASH.

Currently, we have a sell signal in place and knowing very well that there is an over-extension in the weekly chart, we shall only be aiming for a close below this middle BB. Even if the stochastics are bearish, we shall consider the 4HR chart and see if there are chances of lower lows.

I will use the Fibonacci retracement tool to assist in entry in the 4HR chart. The reason is simple, we are taking short entries and since there is a correction in progress, potential reversal zones should be mapped out.

 More often than not, ideal reversals zones should be around the 50% and 61.8% levels and if buyers are persistent, even the 78.6% level might be tested.

 I’m planning for the latter any stochastic sell signal or a double bar reversal pattern around December 22 highs of $400 shall be a shorting opportunity.