As many know, Monero XMR is a cryptocurrency focused on the principle of enhanced privacy when conducting transactions on the blockchain. The project has been successful at positioning itself atop the privacy-focused coin market; thanks in part to its strong team and community. We’ll detail updates on both as well as a technical analysis of Monero XMR price.
Monero’s Strong Community Steps Up
Despite becoming more reputable by the day, the cryptocurrency community is still plagued by bad actors, malware and scammers. On a deeper level, some traditional institutions have expressed concern over cryptocurrency being used for illicit means, such as money laundering and funding illegal operations.
On the back of such concerns, community members from market-leading privacy coin Monero (XMR) are looking to launch an initiative to combat common crypto scams.
The initiative, announced on Monero’s official site by Justin Ehrenhofer, comes from a community with a vested interest in changing the public perception of certain coins. The same reasons that Monero has attracted a large number of advocates also invites concern from others.
Due to its private, untraceable nature, Monero has become a favorite for scammers. A recent report showed approximately $175 million in Monero had been mined by “cryptojacking” programs. The number is far more than any other coin, and represents more than 5 percent of the total circulating supply of XMR.
In Ehrenhofer’s announcement, he stated the accessibility of Monero’s mining algorithm was a positive thing, but unfortunately opened itself to bad actors.
“While the vast majority of users take advantage of these features for good, some attackers use Monero to earn money from machines without users’ consent. They may run miners on webpages that activate without a user’s consent. They may infect machines or hide it in other packages and run mining software. They may infect machines, encrypt the local files, and demand a ransom payment in Monero.
“The Monero community condemns this malicious, non-consentual use of equipment to mine.”
The community initiative to combat malware comes in the form of an educational website, with advice provided by a community-driven group called the Monero Malware Response Workgroup. The site will provide diagnoses and action plans for Unwanted In-Browser Mining, Unwanted System Mining, and Ransomware attacks.
Users can access the group’s content at https://mrw.getmonero.org/
Further positive Monero news comes from ViaBTC, which has launched a Monero mining pool that comes with a 50% reduction in mining fees for the first three months of subscription.
The price action of the XMR/USD pair is presently confined within the borders of a long term symmetrical triangle. So far, this triangle has been four months in the making, and we are not close to the apex yet. This is what the chart looked like at close to the end of the week:
XMR/USD Weekly Chart: October 1, 2018
The trade scenario is very clear from the weekly chart. The expected conclusion of a symmetrical triangle is for price action to break out of either the upper border or the lower border of the pattern. The directional bias of the breakout is the direction of the initial trend, prior to when the price action entered the pattern. But this is not a hard and fast rule, and traders ideally should be paying attention to the following:
- How close the price action is to the convergence point of the trendlines (the apex).
- Whether or not the price bars/candles have violated either of the trendlines, and has closed below the lower trendline or above the upper trendline.
- The extent to which the breakout candle has closed beyond either trendline, and whether or not a pullback rejection to the broken trendline occurs.
On the weekly chart, we can see that the price action is starting to trend towards the upper resistance line that forms the upper border of the triangle. At the same time, we also see the 10-day moving average forming a resistance that is just above the price candles.
Chart for XMR/USD: October 3, 2018
The 50-day EMA can also be seen way above the price action, which shows that as far as bias is concerned, there is a lot of resistance to further upside movement. So here are the possible price action scenarios.
Trade Scenario 1
Going by the price activity on the weekly chart which has resulted in the formation of a symmetrical triangle, the candle/bar will possibly find resistance at the upper triangle trendline. This could possibly happen this week. The 10-day EMA is also expected to resist further upside price moves. So in the absence of a break of the upper trendline, the trendline is likely to be tested several times by the current candle and also the next weekly candle. Several tests of the trendline without a successful upside breakout will open the door for price to retreat and aim to attain the lower trendline, thus preserving the triangle pattern.
Trade Scenario 2
Although not likely at this time, it is possible that an upside breakout could occur. However, there has to be some market news to provide this impetus, so that the candle/bar would break above not just the upper trendline, but also the 10-day EMA and the 50-day EMA above it. The 50EMA is hovering at the $150 price area. A look back at the price action shows that this $150 price area corresponds to a previous support (points marked 1 and 2), which subsequently reversed roles to become a new resistance (points marked 3 and 4). So any bullish trades setup to benefit from an expected breakout must be wary of these areas.
Trade Scenario 3
It is also possible that price action will be rejected at the upper trendline, and go down to break out of the lower trendline. This will be in keeping with the directional bias seen most of the time with symmetrical triangle breakouts, as the initial trend on the XMR/USD prior to the formation of this pattern is the downtrend. If this occurs, then short positions would be in order.
The long term, mid-term and short term outlook of the XMR/USD pair is:
- Long Term – neutral/bearish
- Mid-term – neutral
Disclaimer: Please note: this analysis was done on a weekly chart. It takes a whole week for a candle to form, so these moves may take several weeks to play out. Entries should be made on shorter time frame charts such as the daily chart.
Eno is an Associate Member of the UK Society of Technical Analysts (STA). He writes about the financial markets and the technology behind the markets. His articles can be seen on several forex blogs and broker educational websites.