Lechango

XMR - Monero | Bubble Pop Scenario

POLONIEX:XMRBTC   Monero / Bitcoin
Demonstrated here, we see Monero's tendency to make 76.4%, 61.8%, and 50% retracements from the tops. After a tremendous rally, this scenario assumes that the move under the 0.0185 BTC             level has signaled the end of the rally and the start of a trend reversal.

Drawing a fibbonaci retracement from the all time low to the high at .0185 BTC             shows the the 1.272 level (and the wick to 1.414) as a likely point of reversal to the downside.

Areas to watch for support are 50% from the current top (~0.013 BTC             ) and 61.8% from the top (~0.01).

A continuation of the uptrend in BTC             should solidify this position, with XMR showing signs of an inverse relationship, Any large events in the BTC             space that could cause a steep decline in BTC             could invalidate this reversal to the downside in XMR, or cause a quick spike to double top at the ATH             and then continue downwards.
Comment: XMR rallied on news regarding the new client with RingCT support. My stop was not quite hit at .0197 but came close pushing past the 1.0 fib (0.0186) on this chart to 0.01925.

Since then, the bounce has retraced downwards on comparatively low volume.

The volume definitely kicked up on this bounce, but still has not come close to the volume that led to the ATH.

The level to watch now is .0162 where we may see a possible inverse H&S form and a continuation to the upside. A breach of .0162 on strong volume should indicate the downtrend from the top is still in play and to expect the first short target outlined on this chart at ~0.013 BTC in quick time. A sharp decline on high selling volume to 0.01 even would also not surprise me.

The XMR bulls do have a good chance to continue further upward here considering the direction of BTC seems very unclear at the moment, China is only moving the market a couple times a week. Volume profile in China (for what it's worth) is showing a fairly neutral bias, however the Western exchanges are showing more of a bearish bias.

BTC futures are showing a more balanced volume profile with no significant bias. A good $40-50 drop in BTC would not surprise me, this would likely show in an inverse relationship with both XMR and ETH, a retest of the 1.272 fib on this chart in this case scenario would be most likely.
Trade closed: target reached: The 61.8% retracement level has been reached and the Gann line touched. Good time to take profit on shorts and brace for bounce.
Good graphic !
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