Monero could be done with its slide as it forms an inverted head and shoulders pattern, which is seen as a classic bullish reversal signal. Price has yet to break past the neckline resistance around $130 to confirm that an uptrend is underway.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. Also, the 100 SMA appears to be holding as dynamic resistance at the moment. Then again, the gap between the moving averages is gradually narrowing to signal slowing selling pressure.
Also, stochastic is starting to turn higher after reaching oversold levels, suggesting that buyers are ready to return. A bullish divergence can also be seen as price made higher lows since mid-September while the oscillator had lower lows. RSI is also pointing north so Monero price might follow suit. The chart pattern spans $80 to $140, so the resulting uptrend could be of at least the same height.
Litecoin founder Charlie Lee’s remarks on how he’s interested in Monero spurred a huge interest for this particular altcoin. Recall that Lee previously sold off his Litecoin holdings so his interest in a different digital asset suggests that it holds more advantages than the one he created himself.
Speaking to SFOX, Lee mentioned that it was the privacy factor of Monero that has drawn his attention, saying:
Another project that I’m interested in as Monero: I think a bit of privacy and fungibility is something that’s missing from Bitcoin and Litecoin, and it’s very much needed.
Lee has previously tweeted about Monero, responding to a hint from Spagni that Litecoin and Monero are working on a project together – something that Lee said that could be possible.
Images courtesy of TradingView.