A bullish pennant (in green) has been developing since a bounce off of support at 0.0096 in late December 2016 reaching a peak and finding resistance at 0.0167.
A cup & handle pattern has been clearly identified and at first it looked as though XMR would be ready to take off in early February 2017 buoyed by the anticipation that Jaxx would be adding an XMR wallet to their multi-platform app. As news came out that this addition would be scrapped for the foreseeable future the price took a tumble below Support Line A which had been holding since November 2016. The price eventually found support around 0.0118 and from this we can see that Support Line B has begun to form which has held firm for roughly 2 weeks now.
On 14th February we began to see a rapid climb up in price again, almost reaching the price level of late January, but it was unable to break through Resistance Line A (formally Support Line A), where the top line of the green pennant transects with Support Line A at 0.0137.
This coincides with Bitcoin's current bullish sentiment, which despite the negativity coming out of China that BTC and LTC deposits and withdrawals would be halted on Chinese exchanges for a month whilst AML (Anti-Money Laundering) systems were upgraded, anticipation of the BTC ETF getting the go-ahead along with issues of a far greater geo-political context are encouraging a run into BTC for speculative as well as safe-haven purposes. Bearish sentiment should be prepared for however if the ETF gets rejected, and one major crypto-currency which could gain the most from this result is XMR, which unlike ETH for example, is designed to be a currency, whose privacy features are far more advanced than BTC and is not currently bogged down by the infighting surrounding the blocksize debate.
Now, looking at the pattern as it has developed so far, we can already see that XMR peaked in Sine 1 in September 2016 followed by a trough in Sine 2 in November. A peak occurred again in Sine 3 in January 2017 and it is here we can see the price working its way down (even though the pennant is bullish) aiming for Support Line C. All signs currently point to a much higher trough in Sine 4 (a higher low) which is a very positive sign.
If sentiment for Monero holds strong we might see a break outwards and upwards of the pennant by the end of February 2017 with Line B as the support until a break through Resistance Line A is achieved. This would take us into Sine 5 - the area judging by previous price movements which can be expected as a peak price area with a pinnacle price point in May.
If sentiment veers more to the weaker side we could see the price drop through Support Line B to continue the part-completion of the pennant. However, as indicated in the chart, pressure from Support Line C along with support around 0.0118 could then be the springboard which propels the price upwards into Sine 5 beyond the level achieved in Sine 3.
Currently the pennant suggests that when it completes, the price it targets is 0.0185 which is in a region of resistance/support from way back in the Sine 1 time-frame. A break through this area might help propel us into the 0.0200 zone which could then very well see a new bubble in price forming as excitement surrounds where it will rise to next.
Will Monero hit a new all time high in May?
To be continued...
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