Monero plunges 63% after parabolic rally — what traders should watch
Monero (XMR) collapsed 63.7% in 22 days following a parabolic January rally that briefly set a new all-time high at $798. The correction accelerated after Bitcoin lost bullish momentum, triggering heavy selling and high-volume liquidation. XMR dropped to a low near $276 on Feb 6. Technical indicators show deep selling: the Accumulation/Distribution (A/D) line hit multi-month lows, the 20- and 50-day moving averages formed a bearish crossover, and the Directional Movement Index (DMI) signals a strong downtrend. Key levels: immediate resistance and magnetic retest zones sit around $390–$420 and $500; the last bullish support was the 78.6% Fibonacci level at $352 (which failed on retest); an earlier support target near $266 had been flagged. Traders should expect the downtrend to continue until Bitcoin and major altcoins stage sustained bounces; retests of $390–$420 or $500 could produce renewed selling. Swing traders and investors face high risk — aggressive dip-buying is likened to “catching knives.” Main keywords: Monero, XMR, crash, 63% correction, liquidation, BTC correlation, bearish retest zones.
Bearish
The article describes a rapid, high-volume 63% correction in Monero after a parabolic rally and links the sell-off to waning Bitcoin momentum — a classic risk-off cascade. Multiple bearish technical signals (A/D at multi-month lows, 20/50-day MA death cross, strong DMI) and failed retests (78.6% Fibonacci at $352) indicate distribution and ongoing selling pressure rather than consolidation. Liquidation heatmaps point to $390–$420 and $500 as magnetic retracement zones that, if revisited, could attract fresh sell orders and stop-loss cascades. Historically, similar blow-off tops followed by >50% retracements (in altcoins during Bitcoin drawdowns) lead to extended downtrends or long-range consolidation before any sustainable recovery. Short-term impact: elevated volatility, increased liquidation risk, and likely further downside or range-bound action unless BTC leads a decisive rebound. Long-term impact: capital rotation away from overheated altcoin speculation toward BTC or more liquid projects until on-chain and volume signals confirm accumulation. For traders: favor risk management — tighten stops, avoid aggressive dip-buying, consider short/hedge strategies or wait for confirmed support and volume-backed recovery before re-entering longs.