The price of Monero has remained under pressure since mid-January, although part of the cryptocurrency market is trying to stabilize. After a sharp decline until the end of January, the price of XMR found support around US$276 on February 6 and has since moved slightly up.
However, this recovery seems fragile. The chart pattern, weak buying action when prices drop, and mixed sentiment data indicate that Monero is likely still heading towards the next significant decline.
Breakdown of Bear Flag and Buying During Weak Corrections Makes XMR Pressured
Since January 14, Monero has been trading within a downward pattern similar to a bearish pole-and-flag. A bear flag is a brief consolidation that occurs after a sharp decline (which ended on February 6 for XMR) and often signals that the downward trend may continue.
After plummeting more than 60% from the January peak, XMR has moved sideways and slightly up within this flag pattern. However, since February 12, the price has started to slip below the lower boundary line, signaling a potential breakdown. This confirms a bearish breakdown at the time this article was written, unless in the coming hours buyers can push XMR back into the flag.
Momentum data shows that there are still buyers during price dips, but their strength remains limited. One useful indicator here is the Money Flow Index, or MFI. The MFI tracks buying and selling pressure by combining price and volume, making it useful for assessing how strong buying action is when prices decline.
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Since February 1, Monero's MFI has continued to rise (creating lower highs) while XMR has moved sideways and declined. This indicates that there are investors buying during price dips. However, the MFI has failed to break through its upper trend line or form a clear higher high structure. This means that while buying interest exists, it is not strong enough to reverse this weak pattern.
The exchange flow data supports this view. After three days of light inflow, Monero recorded a net outflow again on February 12, with around US$372,000 XMR leaving the exchange. A negative net flow is usually a sign of increasing buying pressure.
This indicates that there are still buyers. Simply put, buyers during price dips are still active, but only with limited strength.
Increased Social Interest Fails to Offset Declining Positive Sentiment
Social data shows one more significant weakness in Monero's current condition.
In recent days, Monero's social dominance has started to rise. Social dominance measures how much attention this asset receives compared to the entire cryptocurrency market. When it increases, it means more people are talking about the asset.
Between February 11 and 12, social dominance rose from around 0.046% to 0.066%. This indicates that interest in Monero has slightly increased after weeks of decline. Historically, a rise in social activity can sometimes be a sign of a short-term price rebound.
For example, on January 12, social dominance skyrocketed to nearly 0.92%. In two days, Monero rallied 25%. A similar pattern emerged on January 18, when social interest rose before the price hit the next short-term peak. However, the current rise in social dominance is much weaker than previous cases. It remains far below the February peak of around 0.106 and is very low compared to the significant spike in January.
More importantly, positive sentiment is actually moving in the opposite direction. Positive sentiment measures how much social conversation is optimistic compared to neutral or negative. Since February 9, Monero's positive sentiment score has plummeted sharply from around 27.26 to just 7.21, a drop of 74%. This is a significant decline.
In January, when positive sentiment soared above 100, a strong rally occurred. Now, sentiment has collapsed even though social conversation has increased. This suggests that people are indeed discussing Monero, but not in a confident or optimistic manner. Much of the discussion appears to be driven by concern, speculation, and downside risks. This weak emotional condition makes it increasingly difficult for Monero's price recovery efforts to gain momentum.
Monero's Price Level Determines the Next Movement
With weak technicals and fragile demand, XMR's price level is now more important than the narrative. For potential upside, the most critical resistance is around US$361, as discussed at the end of this section.
This level becomes the center of the bear flag structure. If there is a sustained upward movement above US$361, it signals that buyers are regaining control and a breakdown may be delayed. However, this does not mean invalidation. If there is no recovery above this zone, the downside risk remains greater.
One small positive signal comes from the Bull-Bear Power indicator. This method compares buying strength and selling pressure to show which side is dominating the market. Recently, bearish strength has begun to weaken even as prices fell through key support. This indicates that sellers are starting to lose some momentum.
If buying during price dips remains robust and bearish pressure continues to weaken, buyers could delay the breakdown and try to push XMR back above US$361.
On the downside, the first major support is around US$308. This level has served as a short-term floor several times in recent days. Below US$308, the next important support is around US$276, which is the lowest level in February.
If both levels fail to hold, the bear flag projection points towards the US$135 area. This target reflects nearly the entire previous downward movement and becomes the next major historical support zone.
