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The rally may have been exacerbated by a short squeeze. On April 27, more than $1 million short positions worth of XMR were wiped out while another $500,000 worth of shorts were flushed out just two days ago.
Short sellers may have abstained from betting against the token lately amid its furious rally and that has probably resulted in significant price imbalances.
However, XMR has reached extreme levels in momentum readings that emphasize the need for a strong correction in the near term.
The Relative Strength Index (RSI) currently sits at 90 while the MACD’s histogram has not posted a negative reading in more than a month.
Despite the rally, XMR is still 21.6% away from its all-time high. Hence, this may not necessarily be the end of XMR’s uptick, even if it pulls back strongly in the next few weeks as the market has some charted territory to run to still.
Key Areas to Watch for a Late Entry
At a point when Bitcoin is making new highs, betting against a rally may not be the best idea. Hence, looking for support areas from which traders can enter long positions can be the best approach.
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