Monero eyes bullish rebound after 5% surge despite regulatory pressure

Monero is beginning to show signs of recovery, with a 5% gain in the past 24 hours, making it one of the standout performers in the market.

As of now, Monero (XMR) is trading at $146.63, boasting a market capitalization of $2.7 billion. This offers some respite to investors following a tumultuous start to October. The month began at $153.80, but XMR experienced a sharp decline, falling to $142.96 on October 2 and hitting a low of $136.43 the next day.

The downward trend coincided with Kraken’s announcement that it would delist Monero in the European Economic Area (EEA) to comply with local regulations, likely in anticipation of the upcoming Markets in Crypto-Assets Act set to take effect in December.

Kraken’s Delisting and Its Impact

Kraken’s decision to delist Monero in the EEA sent ripples through the market, raising concerns about regulatory scrutiny on privacy coins. Monero’s technology, which masks transaction details, has been under increased regulatory scrutiny, and the impending MiCA framework seems poised to heighten these challenges.

Interestingly, the timing of Monero’s price drop has raised eyebrows. There are claims that XMR began to sell off prior to Kraken’s delisting announcement, leading to speculation that insiders may have acted on non-public information. This is particularly suspicious given that the broader cryptocurrency market was experiencing a rally at the same time, while Monero saw a notable decline.

Despite the regulatory challenges facing Monero, supporters of privacy coins remain optimistic. They argue that Monero’s focus on anonymous transactions keeps it relevant, even in the face of exchange delistings. A Monero advocate known as ‘Klaus’ stated, “No matter if it holds this price or drops below a dollar, you can bet that whales will continue to use this technology to manage their wealth.”

However, Monero has yet to fully recover from its lows in October, and trading volume has seen a decline. Currently, XMR’s daily trading volume is around $67.8 million, marking a 24.5% drop, which indicates a decrease in trader interest.

Technical Outlook for Monero

From a technical standpoint, Monero has bounced back from a key support level at $134, which has been significant since early July. This rebound has pushed XMR above the lower Bollinger Band, but the next major resistance lies at $163, the midline of the Bollinger Bands. For Monero to confirm a sustained bullish reversal, it will need to break through this resistance level with strong momentum.

Beyond the $163 resistance level, the psychological barrier at $180 poses a significant challenge, having previously thwarted upward movements in both June and September. For Monero to regain a stronger bullish momentum, overcoming these levels will be crucial.

Technical indicators present a cautiously optimistic outlook. The Moving Average Convergence Divergence (MACD) remains in bearish territory, with the MACD line still below the signal line. However, their convergence suggests a potential shift in momentum may be on the horizon.

The histogram is currently in the red, indicating that selling pressure might be subsiding, which could allow bulls to take control soon. While volume levels are stable at the moment, they are not yet strong enough to suggest a decisive bullish move. An increase in trading volume will be essential for Monero to gain the momentum needed for a more substantial recovery.