Key Insights:

  • Monero’s break below key structural levels confirms ongoing bearish momentum, but oversold conditions open doors for potential reversal at $226.

  • The $226 support zone is critical for Monero, as it could trigger a short-term bounce or bottoming structure if tested.

  • A trend reversal will require confirmation through structure shifts and volume-supported recovery, with $344 acting as the next resistance.

Monero has experienced a strong continuation of its downtrend, recently breaching a significant structural level that has long defined its trading range. The break below the value area low has confirmed a sustained bearish trend, causing concern among traders. However, despite the downward momentum, the asset's current oversold conditions could potentially pave the way for a bounce or reversal in the near term.

The violation of the value area low in Monero indicates a structural development, which is being affected by downtrending lows and lows. The breakdown supports the dominance of the bearish market mood, and this will indicate further downtrends in the short-term perspective of the asset. The cautious nature by the market participants would continue because the trend has not been receding significantly without a sharp indication.

Oversold Conditions and Support at $226

The price decline has now led Monero into oversold territory. This condition increases the probability of a relief bounce, particularly if the next high-time-frame support level around $226 holds. This support zone, yet to be tested, could provide a foundation for potential buying activity, leading to a short-term reversal or consolidation phase. The probability of a bounce is heightened by the increasing oversold conditions, as buyers may step in at this level to stabilize the price.

Source: TradingView

In order to form a trend reversal, the asset has to form a higher low and later take on the form of breaking structure, which will be a higher high. Although there is support at 226, which creates the hope of a conjecture high, any rebound will need to be acknowledged on a structural change on the daily chart. Along with it, volume support will play a key role in confirming that there is a real change, and traders will be keen on searching for indicators of this shift.

Consolidation Range of $226 to $344

In case the support in the beginning of the range, at $226, holds, Monero might be entering a consolidation period where a range could be made between the $226 support and $344 resistance. This movement may take a long time before the market decides the course that will be taken next. Nevertheless, at least with no visible evidence that a reversal in a trend occurred, the price of Monero can remain shaky within this range.