Monero (XMR) shed nearly 20% of its value in a single day and briefly dipped below the $500 mark, though on-chain data and derivatives metrics suggest the sharp decline may reflect a leverage flush rather than a fundamental trend reversal.
What Happened: Privacy Coin Drops 20%
The sudden price drop sparked concern among short-term traders. Yet current indicators point to controlled selling rather than panic-driven distribution.
The Money Flow Index pulled back but remains above the neutral 50 level, suggesting demand still outweighs selling pressure. Because MFI blends price and volume, holding positive territory implies post-rally exhaustion rather than structural weakness.
Open Interest fell 20.8% over 48 hours, sliding from $624 million to $494 million. On the surface, that looks bearish.
In reality, the decline more likely reflects overextended longs getting shaken out. Funding rates stayed positive throughout the drop, meaning traders are still paying to maintain long positions.
Analyst Matthew Hyland pointed to XMR's decade-long ascending triangle pattern, with price consistently respecting a rising diagonal support dating back to the 2016-2017 cycle. "IMO $10k–$125k over the next 5–20 years," he said, outlining his long-term outlook for the privacy coin.
Also Read: Ethereum Reserves Hit 10-Year Low Across Exchanges As Price Falls Below $3K
Why It Matters: Recovery Potential
At the time of writing, Monero trades around $499. The sell-off pushed price below the 23.6% Fibonacci retracement level.
A quick reclaim above $500 would neutralize much of the downside risk. With no signs of aggressive distribution and longs still in control, a rebound toward $560 remains possible, with $600 back on the radar if momentum builds.
The bullish setup breaks if sentiment flips and profit-taking accelerates.
In that case, $450 becomes the next key support, and losing it would expose XMR to a deeper move toward $417.
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