Monero (XMR) faces the risk of a correction as market momentum weakens

Monero (XMR) continues to slide below the 400 USD mark in the early week trading session, extending the weakening trend from the previous day. The daily decline of this privacy-focused cryptocurrency raises the risk of forming a double top pattern, especially as the RSI indicator signals a sell. This development also puts the rising wave of optimism in the XMR derivatives market — reflected in the sharply rising OI of futures contracts — at risk of being eroded.

The Monero derivative market maintains optimism

Monero continues to be the focus of attention for retail investors as the privacy coin group shows superiority over the overall market. Data from CoinGlass shows that the open contract (OI) for XMR futures – representing the total nominal value of open positions – has increased to 88.83 million USD, approaching the annual peak of 97.98 million USD set on November 10. This figure reflects the optimistic sentiment of traders and expectations for XMR's recovery.

The open contracts of Monero futures | Source: CoinGlassAt the same time as the rise in OI, the funding rate according to OI also reversed to a positive level of 0.0084%, after unexpectedly dropping to the negative zone earlier in the day. This indicates that buying pressure is dominant and investors are willing to maintain Long positions, further reinforcing signals of confidence in the bullish trend.

The funding rate of XMR | Source: CoinGlass## Monero faces the risk of a deep fall as the upward momentum weakens.

Monero (XMR) has fallen below the 400 USD mark in Monday's session, extending the 2.54% adjustment from Sunday and completing the second peak in a potential double top pattern at the 419 USD level. As of the time of writing, this privacy-focused coin continues to fall an additional 2%, as the bears gather strength towards the neckline ( around 358 USD – coinciding with the peak level on July 14.

If XMR cannot hold above 358 USD, the selling pressure may push the price back down to the 50-day EMA at 344 USD, before testing the 100-day EMA at 324 USD.

![xmr-dieu-chinh])https://img-cdn.gateio.im/webp-social/moments-5e6e42bc1738cff3085d96b7b27b9625.webp(Daily chart of XMR/USDT | Source: TradingViewThe momentum indicators on the daily timeframe are signaling weakness. The RSI at 59 has moved away from the overbought zone, indicating that buying pressure is decreasing. The RSI creating a lower peak while the price forms a double top also shows a bearish divergence – a factor that often signals the risk of an extended correction.

At the same time, the MACD is narrowing the gap with the signal line, warning of the potential for a bearish crossover as the market's weakening momentum becomes increasingly evident.

However, if XMR can break back above 419 USD, the upward trend may recover and target the peak area of 471 USD set on November 9.

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