The cryptocurrency market is going through a correction after the recent surge above $8,000. Yet, relative to BTC, will privacy coins fare any better? Using two indicators—support resistance levels and moving averages—it is possible to assess the outlook for Monero, Zcash, Verge, Komodo, and Grin.
The first technical attribute that will be used to analyze the mid-term future of the top anonymity coins is the support and resistance points. According to Investopedia, these are defined as a series of predetermined “price levels on charts that tend to act as barriers, preventing the price of an asset from getting pushed in a certain direction.”
Support points are able to hold or pause the market valuation of an asset during a downtrend, due to the volume of buy orders. Conversely, resistance points contain the price of an asset from continuing to ascend during an uptrend because these can be seen as profit taking levels where the volume of sell orders are high.
Additionally, the moving averages (MA), which are some of the most popular indicators, will help determine the short-term outcome of the cryptocurrencies in this analysis. A moving average is a trend line produced by looking at the average price of an asset over a specified period of time.
On the 1-day chart, Monero went through a consolidation period from Apr. 3 until May 10. During that time span, it was trading within a series of support and resistance levels between $73 and $62.
After XMR broke out of that range, it went up to the next resistance point sitting at $78.6 which became support once it was breached.