Monero price action pulled off an impressive rally in the first 3 weeks of May, with what was effectively its second biggest rally since its 2021 peak.
However, extreme overbought price action also yielded a major retracement. It made XMR the biggest weekly loser in the last week of May.
Monero price was bound to experience a retracement after delivering an impressive 152% rally from its lowest price point in April.
That retracement occurred in the last week of May, during which the cryptocurrency pulled back by as much as 25%.
XMR had the heaviest weekly outflows of all the coins in the top 50 cryptocurrencies by marketcap. An expected outcome considering that it was extremely overbought prior to the retracement. It tanked from its $420 weekly high to $313 at its lowest weekly price point.
Source: TradingView
Can Monero price action bounce back as sell pressure cools?
XMR price hovered at $325 at press time which as a historically noteworthy zone. This is because the cryptocurrency previously faced resistance within the same price zone on multiple occasions.
It is worth noting that sell pressure cooled down significantly within the same zone. That means it could now act as a support zone.
The RSI leveled out slightly. However, the cryptocurrency was still trading at a healthy premium compared to its lows in April.
While the cool down suggests that Monero price could kick off June with some recovery, the risks of more downside remained high. Especially on account of the anticipated disruptions as global economic tensions surge once more.
Fibonacci retracement data suggests that XMR price could drop further towards the $291 to $261 price range. Price previously found support just below the $270 price level, which could also be the case in the event of further downside.
The prospects of more downside were also exasperated by an anti-monero sentiments sweeping across European media. Nevertheless, those sentiments likely had no impact on Monero holders or users.
Transactions maintain positive growth trajectory
Speaking of Monero transactions, recent data confirmed positive month-over-month growth despite delisting across most of the top exchanges.
The ratio of Monero vs Bitcoin transactions clocked 10.93% in May, marking the first time in recent history that it surpassed 10%. This was courtesy of a surge in XMR-related transactions during the month.
Source: X
According to the data, Monero had over 1.2 million transactions in May compared to Bitcoin’s 11.2 million transactions during the same period.
The ratio’s spike in the ratio to more than 10% was a testament to the heavy demand that XMR achieved during the month. It was also aided by a surge in multiple platforms that offer Monero-Bitcoin convertibility.
These platforms have been filling the accessibility gap left when Monero was delisted by multiple exchanges. Monero demand is set to continue rising especially as governments set crypto rules.
The privacy coin segment will likely remain strong, with Monero at the top of the list of top coins in the segment.
Speaking of demand, XMR registered some positive spot flows in the last 24 hours as the bears eased off their assault. The cryptocurrency experienced roughly $11.5 million worth of spot outflows in the last week of May.
Daily volumes managed to stay above $50 million during the week, signifying healthy activity. However, open interest cooled down from over $56 million to just over $38 million during the week.
The big question now is this. Was the recent Monero surge a fluke or will it achieve the same momentum in the second half of 2025?
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