Key takeaways
- XMR fell by 2% and may record further losses in the near term
- Fed hawkishness is impacting the broader cryptocurrency market.
Privacy coins remain under pressure amid weak risk appetite
Monero (XMR) continued its downward trajectory on Friday as bearish sentiment persisted in the cryptocurrency market.
XMR fell for the third session in a row, remaining below the $330 level.
The broader cryptocurrency market has come under renewed pressure following comments from Federal Reserve Chairman Kevin Warsh during his first post-meeting news conference on Wednesday.
While the Federal Open Market Committee (FOMC) left interest rates unchanged, in line with market expectations, investors reacted negatively to the central bank’s hawkish tone.
Policymakers affirmed their commitment to restoring inflation to the 2% target in the long term, while prioritizing price stability over monetary easing in the short term.
Warsh’s comments suggest that the Fed remains comfortable maintaining its current policy stance and is not yet considering cutting interest rates. Market participants are even starting to estimate the possibility of another rate hike, with current forecasts indicating a 30% chance of a rate hike at the next policy meeting.
Risk appetite weakened further as the cryptocurrency Fear and Greed Index fell to 15 on Thursday from 22 the previous day, keeping the market firmly in “extreme fear” territory. This decline highlights increased investor caution and reduced exposure to risky assets.
Monero Price Forecast: Correction continues below key resistance levels
Monero remains trapped below the middle line of the Bollinger Bands near $340 and all major Exponential Moving Averages (EMAs).
The 50-day moving average is near $359, while the 100-day and 200-day moving averages are converging near $366, creating a significant area of resistance.
Despite the ongoing correction, technical indicators are showing signs of improving momentum.
The Moving Average Convergence-Divergence (MACD) histogram remains positive, while the Money Flow Index (MFI) near 65 indicates steady capital flows.
However, these signals currently point to corrective bounces rather than a broader trend reversal as long as XMR remains below key resistance levels.
Immediate resistance is located around the middle line of the Bollinger Band indicator at $340, followed by the 50-day moving average near $359.
A stronger resistance area appears around the $367 area, where the 100-day and 200-day moving averages meet. Moreover, the Bollinger Band upper bound near $389 represents the next major hurdle for buyers.
On the downside, there is support near the lower Bollinger band at around $291. A breakdown below this level could accelerate losses and lead to a deeper bounce despite the recent improvement in momentum indicators.
Monero remains vulnerable to further declines as macroeconomic uncertainty and restrictive monetary policy continue to weigh on investor sentiment.
While technical indicators point to some fundamental buying interest, privacy coins must reclaim key resistance levels before a more sustainable recovery can take shape.
