Monero (XMR), known for its privacy-centric features, is facing a challenging week as its price continues to decline after failing to break past a key resistance level. The rejection at the $180.79 mark has set the stage for a potential bearish turn, with on-chain data and technical indicators pointing towards further downside risks. As traders digest this information, many wonder if Monero’s price will experience a more significant drop in the days to come.

Resistance Rejection Signals Potential Downtrend

On Monday, Monero’s price attempted yet another retest of the critical resistance at $180.79, only to face rejection. This marks the second time in a few days that Monero failed to break through this level, heightening concerns among traders about its future price direction. As of Tuesday, XMR is trading lower at $169.13, well below the ascending trendline that had been supporting its upward trajectory since early August.

The rejection at this resistance level and the subsequent failure to maintain support around the ascending trendline has resulted in a 2.78% drop, signaling that Monero may be entering a bearish phase. If Monero continues to trade below $180.79, the price could decline further, potentially extending the drop by 10%. The next significant support level is found around the 61.8% Fibonacci retracement level at $152.73, drawn from the low of $135.95 in early August to the September high of $179.84.

Technical Indicators Point to Further Weakness

Several key technical indicators are flashing warning signals for Monero, reinforcing the bearish outlook. The Moving Average Convergence Divergence (MACD) indicator, a popular tool used to assess momentum, has turned negative. The MACD line (blue) has crossed below the signal line (yellow), signaling a bearish crossover. Additionally, red histogram bars are appearing below the zero line, further indicating downward momentum in Monero’s price.

Another concerning sign is the Relative Strength Index (RSI), which is currently trading at 48—below its neutral level of 50. The downward trajectory of the RSI suggests that Monero could experience increasing selling pressure. Typically, an RSI below 50 indicates that bears are gaining control of the market, reinforcing the likelihood of continued price weakness.

Bearish Sentiment Among Traders

On-chain data further supports the bearish sentiment surrounding Monero. The long-to-short ratio for Monero, tracked by Coinglass, has fallen to 0.766, the lowest level in a month. A ratio below 1 indicates that more traders are betting on Monero’s price to decline rather than rise. This reflects a shift in market sentiment, as traders increasingly expect the cryptocurrency to lose value.

The long-to-short ratio is a critical indicator of market sentiment and tends to influence price movements. As more traders open short positions, the selling pressure could exacerbate the ongoing decline, pushing Monero closer to the key support at $152.73. If this level is breached, a steeper correction could follow.

What Could Reverse the Bearish Trend?

While the outlook for Monero appears bearish in the short term, there is still a chance for a reversal. For the bearish thesis to be invalidated, Monero’s daily candlestick would need to close above the critical resistance level of $180.79. If this happens, Monero could regain bullish momentum and potentially climb to retest the psychologically important level of $190.

A break above $180.79 would not only invalidate the current bearish scenario but also re-establish confidence among traders, signaling that the recent pullback was merely a temporary correction in an otherwise bullish market. However, as long as the price remains below this key resistance, the downside risks remain prevalent.

Conclusion: Bearish Momentum Builds as Traders Eye Key Support Levels

Monero’s failure to break through the $180.79 resistance level has paved the way for a bearish outlook in the short term. Technical indicators such as the MACD and RSI, along with the declining long-to-short ratio, all suggest that the cryptocurrency is likely to face further downward pressure in the coming days.

If Monero closes below the ascending trendline and continues to reject the $180.79 resistance level, the price could drop by 10%, targeting the 61.8% Fibonacci retracement level at $152.73. However, if XMR manages to close above $180.79, the bearish scenario would be invalidated, opening the door for a potential retest of $190.

In a market as volatile as cryptocurrency, the upcoming price action will depend on a combination of technical factors and trader sentiment. Investors and traders will need to keep a close eye on Monero’s next moves, as any break above or below key levels could determine the next major trend for this privacy-focused cryptocurrency.