Monad [MON] has had one of the most struggling performances among crypto tokens in recent times. In the past year alone, the asset has posted gains of just 11.58%, according to CoinGlass, and more recently, the asset has dropped 13% in the past 24 hours.
Chart analysis using the 1-day time frame shows that while the outlook for MON appears grim as the price continues to drop, there’s a bullish probability that could still hold.
The present decline in price has now pushed the asset into a demand zone on the chart marked in blue, where there’s a high probability of buy-side liquidity in that zone.
Market reaction from this level should see the price take a swing higher, reaching the closest target at $0.035, while stronger momentum could see the price trade up to $0.037.
There’s a possibility that the market sees a rebound, especially as the 20-day SMA remains above the 50-day SMA on the chart. One major hurdle, however, would be the price trading past the descending resistance line above it in the case of a rebound.
If bearish dominance persists, the price is likely to drop toward the ascending support line below, where buyers could accumulate, as they did on the previous three occasions.
Bearish pressure remains on the table
The chances of a decline can’t be eliminated yet, as indicators point towards further weakness.
The Aroon Indicator, at press time, showed that bearish pressure was still in place. This is based on the Aroon Up (orange line) dropping to around 72.7%, while the Aroon Down (blue line) rose to 27.5%.
The case still maintains that MON is bullish more broadly, as the Aroon Up is above the Aroon Down. However, in a more bullish case, the Aroon Up remains at 100.00%, while the Aroon Down maintains a level of 0.00%.
Similarly, the Parabolic Stop and Reverse (SAR), on the other hand, has printed a similar bullish pattern in the market, with price dots forming above the price.
For now, the Parabolic SAR still maintains that the market condition is mildly bearish, especially as there’s just a dot above the price presently.
A notable case would be that the price is likely to decline slightly, potentially deeper into the marked demand zone on the chart, before a rebound takes place.
Spot accumulation could support a rebound
MON’s decline has been met with accumulation and strong buying activity in the market. Currently, the spot market Netflow, which tracks this, shows a -$1.21 million Netflow in MON.
The Netflow follows roughly $10.46 million worth of MON accumulated since the start of the 6th of September. Accumulation at this scale suggests investors see the decline as an opportunity to accumulate the asset.
If the accumulation continues, there’s a high chance that the present demand zone could provide the needed catalyst for a rebound, as buyer dominance is strong.
Final Summary
- MON could rebound from the current demand zone toward $0.035 and potentially $0.037.
- Spot market accumulation could support a rebound despite continued bearish pressure.