Monero breaks down as oversold conditions set stage for potential reversal

Monero has broken beneath the value area low of its long-standing trading range, confirming sustained bearish momentum. However, deeply oversold conditions now open the door to a potential bounce or reversal.

Summary

• Monero remains in a bearish trend after breaching the value area low.
• Oversold conditions increase the probability of a relief bounce or base forming at $226.
• A trend reversal requires daily structure confirmation and volume-supported recovery.

Monero (XMR) has seen a strong continuation of its downtrend, breaching key structural levels that previously defined its trading range. With the break below the value area low, market structure remains bearish. However, oversold conditions are becoming evident. If the next high time frame support at $226 holds, there is potential for a short-term bounce and the development of a reversal pattern in the coming sessions.

Key technical points

• Breakdown Level: Value area low breached, confirming bearish trend continuation.
• Next Support Zone: $226 high time frame support, yet to be tested.
• Bounce Scenario: Oversold conditions may trigger a short-term reversal or base formation.

Monero’s recent price action confirms a strong bearish leg, pushing the asset out of its previously intact trading range. The loss of the value area low marks a significant structural shift and adds to the current series of lower highs and lower lows, which have defined the recent downtrend. With this move, the trend remains firmly bearish until evidence of reversal begins to emerge.

However, the speed and depth of the decline have now pushed price into oversold territory, a condition that often leads to countertrend bounces. Technically, the next high time frame support sits at $226, a level that has not yet been tested but is highly likely to attract interest from buyers if reached.

This opens up the probability for a bottoming structure to develop around this support region, potentially forming a base that could lead to a reversal toward higher levels, most notably the $344 high time frame resistance. However, this scenario requires confirmation through structure shifts on at least the daily chart, which may take multiple sessions to form.

For the current bearish trend to be invalidated, Monero must first establish a higher low, followed by a break in structure with a higher high. Until that happens, the broader trend remains pointed downward, but there is increasing probability of a temporary bounce or sideways consolidation phase.

If a reversal does develop from the $226 level, Monero could enter a new range between $226 support and $344 resistance, forming a consolidation zone. This type of price action may persist before a clear breakout direction is established.

What to expect in the coming price action

XMR is approaching key high time frame support after breaking down from its established range. If $226 holds and a bottoming structure begins to form, expect a possible bounce toward $344 resistance. However, confirmation is still required, and the correction may continue in the interim.