On the brisk morning of January 31st, Monero [XMR] pranced its way up to $500.87, a sprightly rise of 8.72% from the sleepy open of the day. One would think the bulls were throwing a grand celebration, perhaps even serving cake. But alas, the revelry was short-lived.
Just when the party was getting good, Bitcoin [BTC] tripped over its own feet, tumbling below the psychological barrier of $80k like a clumsy dancer at a wedding. Talk about a party foul!
As I write this, XMR finds itself almost back at the comforting embrace of the $450 support level, like a weary traveler returning home after a misadventure.
An AMBCrypto report from earlier this month suggested that what looked like a jubilant rally might just have been a classic case of a blow-off top-akin to a soap bubble bursting after being blown too big. With Bitcoin also facing pressure, it’s no wonder the mood became as gloomy as a rain-soaked Monday.
Particularly, the liquidity pockets hovering around $500-$510 and $560-$580 were marked as potential spots for a bearish reversal, a sort of ominous traffic sign warning the bulls to slow down. And lo and behold, the $500 pocket indeed turned away the Monero bulls’ daring attempt at recovery with a stiff arm.
Where to next for Monero?
The market sentiment? It feels like a group of children caught in a thunderstorm, with a Fear and Greed reading of just 18. Bitcoin is tiptoeing toward its weekly swing low at $74k-a critical support level that feels more like a tightrope than a safety net.
The MFI, that trusty indicator of market health, displayed bearish momentum with capital flow resembling a sluggish river. High trading volume during the price drop from the all-time highs sent the A/D indicator crashing down to new lows-like a rollercoaster ride gone horribly wrong.
Yet, amidst the chaos, XMR maintains a bullish swing structure on the daily chart. It has valiantly defended the 61.8% retracement level, standing tall against the market-wide tempest-a glimmer of hope in a stormy sea.
This is precisely why short-selling the privacy token now feels akin to juggling chainsaws-it’s risky business, my friends.
Balancing the two forces
Monero sits in an unusual position for swing traders, like a cat contemplating whether to leap onto a ledge. It doesn’t offer an obvious buy or sell signal, leaving investors to ponder whether to wait for a price dip to $415 or $352 before taking any action.
If Bitcoin decides to plunge below $74k, buying Monero would be like diving into a pool with no water-risky at best. Yet, the bulls’ defense of that 61.8% retracement level shows a commendable resilience, a bit like a stubborn mule refusing to budge.
Traders’ call to action – Wait
The 1-month liquidation heatmap reveals why the price action is akin to a game of musical chairs-not favorable for either bulls or bears. Nearby liquidity clusters sit at $400-$415 and $500, waiting like eager contestants for the music to stop.
Traders would do well to wait for a sweep of either of these zones before diving into a trade, anticipating a rapid move toward the opposing magnetic zone-as if drawn by some unseen puppeteer.
If BTC loses its grip on $74k, exercise caution before going long on any altcoin. After all, in the world of trading, one must be as careful as a cat walking on a fence.
Final Thoughts
- The Monero price action’s swing structure on the 1-day timeframe remained bullish despite January’s wild ride.
- The liquidation heatmap highlighted two crucial nearby zones where an XMR short-term reversal could take place-stay alert!
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2026-02-01 10:50