Monero Price: Bears Cool Down After Massive Profit-Taking Event

Monero price kicked off this week with its biggest pullback in the last 2 months. This was despite hopes that it could potentially maintain its previous bullish momentum and potentially retest its 2021 ATH.

We have been closely monitoring Monero price action recently especially after prior events in April thrust it into the spotlight. It was extremely overbought last week, which raised the probability of a retracement.

As fate would have it, Monero (XMR) turned bearish this week, with price retracing from its $420 local high on Monday. It dropped as low as $321 in the last 24 hours after a massive wave of profit-taking which pulled down the price by as much as 23%.

Despite the wave of sell pressure, Monero downside showed signs of cooling down after pushing to the 50% RSI level. It was already up by 6% at its $346 press time price tag at press time.

The Monero Price Pullback May have Been a Normal Occurrence

Monero’s performance this week made it the biggest loser among the top 50 coins. However, no event was tied to the shift in sentiment from bullish to bearish. In other words, the bearish outcome was likely due to profit-taking.

Extremely overbought conditions encouraged investors to take some profits off the table. Monero price was up over 150% from its lowest price in April to its recent peak earlier this week.

Over $5.4 million worth of liquidity was pulled out of the privacy coin in the last 3 days. This marked its biggest spot outflows observed on a year-to-date basis. It was more than the outflows observed during the tumultuous phase in March and April.

The fact that price was already showing signs of recovery in the last 24 hours was already a sign that demand was making a comeback. A sign that it was still able to command healthy demand.

In fact, such a massive pullback was nothing new for the privacy coin. Monero’s past price action revealed instances of massive pullback on its way up.

Some retracements during the 2016 to 2018 bull run revealed 50% to 70% dips, which made the recent pullback look like child’s play. This could turn out to be the reality during overheated phases especially with price experiencing massive rallies.

Pullbacks May Present Exit Strategies for the Recently Stolen Funds

Monero price’s latest pullback also brought attention back to the Bitcoin heist in April where the culprits made away with Bitcoin worth over $330 million. Reports revealed that authorities investigating the heist hit a brick wall when the funds were converted into Monero.

The movement of funds through profit taking suggests that the perpetrators may use profit-taking to withdraw funds. This may present a chance for the authorities to make headway in the investigation.

However, the fact that Monero is a privacy coin means catching the crooks might still be a challenging endeavor. This is because the XMR they hold may be held on exchanges may end up being mixed with other funds not involved in the heist.

Nevertheless, the wave of Monero sell pressure may create a chance for investigators to follow the money trail. In the meantime, XMR’s performance has recently attracted attention and raised optimism about its long-term potential.

The aggressive buyback in the last 24 hours confirmed that investor optimism prevailed and that many still find the coin appealing below the $400 price level.

But despite the recent recovery, some questions remain. Will Monero price maintain its appeal well into new all-time highs? And will major exchanges change their sentiment around the cryptocurrency and embrace it?

XMR would likely benefit from access to massive liquidity flows if it were to make its way into the mainstream once again but that was still in the realm of speculation.

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