Key Takeaways

What is driving Monero’s latest recovery?

Improved Netflow, stronger CMF readings, and rising sentiment supported XMR’s bounce and kept buyers active at key Fibonacci levels.

What threatens the continuation of this move?

A weak A/D trend and a proven descending resistance still limit upside and could force XMR toward lower support zones.

Privacy tokens extended their strong month, delivering a weighted 54.6% gain across the sector.

Monero falls into this category, with the token posting a 14% gain over the past day. However, new fundamentals suggest that the path for a continued rally remains slim.

Investors return with liquidity

The most recent gain in Monero [XMR] followed renewed confidence among investors in the market.

Community sentiment over the past 48 hours has reached 74%, up from about 67.5% previously.

A surge of this type suggested that investors anticipate a potential rally in the market. This optimism was reflected in spot market purchases.

CoinGlass data showed $1.87 million in positive Netflow during the period, confirming renewed buying pressure. This type of activity tends to add the necessary demand, reflecting growing investor conviction.

In fact, accumulation in the past week reached $4.68 million, the second-largest weekly accumulation recorded for the asset. A continued trend in this direction would be a positive development for the price.

Hurdles ahead for price

XMR’s chart showed early weakness despite renewed optimism. The price traded directly into a descending resistance trendline, creating immediate rejection pressure.

At press time, XMR hovered near the 0.5 Fibonacci Retracement at $394.25, a level that might offer short-term demand.

A rebound from the zone could trigger another move toward the descending trendline, which has rejected the price three times. Even so, repeated attempts at this resistance increased the chances of a future breakout if momentum improves.

Will bullish momentum hold?

The probability of a rebound on the chart remained moderately high, supported by bullish indicators.

This outlook is based on readings from the Chaikin Money Flow (CMF) and the Accumulation/Distribution (A/D) indicator.

For your context, the CMF measures the ratio of buy and sell volume to help determine the market’s potential direction.

At the time of writing, the CMF sat above the neutral zone (zero), implying that buying activity outweighs selling pressure.

However, the Accumulation/Distribution indicator showed that investors cooled off on buying the asset and were on the sidelines, potentially waiting to buy at lower levels.

A rebound in the A/D indicator would serve as confirmation that XMR could weaken the resistance zone.

If both the CMF and A/D trend downward simultaneously, XMR is likely to fail in sustaining a rally and may instead move toward the next nearest support level.