The price of Monero has stabilized after a sharp correction, but the rebound is not straightforward. After peaking around 800 USD on January 14, XMR dropped by about 33%, eliminating late buyers. Since then, the prices have been stuck in a narrow consolidation, forming a potential continuation pattern.
At first glance, the structure looks bullish. However, when combining momentum, capital flows, and spot market behavior, the signals are mixed. A breakout is possible, but the supporting conditions are uneven.
Large capital is appearing, but buying the dips looks uneven.
On the 12-hour chart, Monero has formed a consolidation resembling a flag after a sharp decline. The price of XMR has now broken through the upper trendline of this structure, suggesting the possibility of continuing a broader bullish trend.
This movement is characterized by capital flow behaviors. The Chaikin indicator, which tracks whether large capital is entering or exiting an asset, avoided a breakdown during consolidation and has turned upward. The CMF is currently close to 0.05. A rise above 0.06 would strengthen the breakout scenario. Stronger confirmation will appear when the CMF shifts into the 0.30–0.32 zone, where previous sustained increases gained momentum.
However, the strength of buying during dips shows something different. The money flow index, which combines price and volume to measure buying pressure, continues to slide downwards. When the price was rising between January 10 and 19, the MFI fell below the 61.7 level instead of bouncing back.
This bearish divergence suggests that buyers are not entering aggressively despite attempts to push the price higher.
In summary, capital flow is improving, but participation remains selective rather than broad.
Spot market trading causes caution during breakouts.
Spot market behavior adds another layer of tension.
On January 18, Monero recorded significant outflows from exchanges amounting to about 23.95 million USD. This indicated accumulation, as coins were moving from exchanges to private wallets. However, during the formation of the breakout candle, this trend reversed.
On January 19, exchange flows reversed in favor of inflows of about 2.31 million USD. This change suggests that some participants used the breakout attempt to possibly withdraw coins onto exchanges. This is a classic signal for taking short-term profits.
This moment is significant. Ideally, a healthy breakout is supported by continuous outflows when buyers decide on higher prices. When inflows occur during a breakout, the risk of rejection increases rather than continuation of the move.
Therefore, while the XMR chart shows expansion, spot market behavior indicates hesitation.
The risk of a long squeeze arises when key levels become clear.
Attempts to break out of Monero cannot be assessed solely through the spot market and money flows. Positioning in the derivatives market introduces additional fragility, making nearby levels crucial.
In the perpetual market XMR/USDT on Binance, positions for the next 30 days are clearly leaning long. The accumulated liquidation of long positions reaches about 13.94 million USD, while for short positions it is closer to 5.72 million USD. This means that about 70% of the market is dominated by longs.
This imbalance is significant because leverage supports the price level rather than exceeding it. In a market overloaded with longs, declines accelerate faster than increases, triggering long squeezes.
This increases the pressure on the current structure of Monero.
From a chart perspective, Monero has broken the upper boundary of its flag formation on the 12-hour interval. As long as the price remains above the breakout zone, the bullish scenario technically still holds. The measured move from the previous pole indicates a range of 910–1150 USD.
For the upward direction to solidify, Monero must close the 12-hour candle above 800 USD, which is the last peak. Without reclaiming this level, the upward momentum could quickly weaken due to leverage pressure.
On the downside, the key danger zone is 620 USD. Staying below this level would threaten the liquidation of a large portion of leveraged long positions worth 13.94 million USD. In the event of this scenario occurring, forced selling could quickly turn a breakout into a failed move, rather than a continuation. A drop below 530 USD would liquidate most long positions and invalidate the bullish structure of the pole and flag.
In short, the price of Monero is currently in a conflict zone. The chart allows for increases towards 1150 USD, but the setup of leveraged longs leaves little room for error. As long as the price does not break above 800 USD, the breakout remains difficult.
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