Monero extends losses as Fed hawkishness weighs on the crypto market

Key takeaways

• XMR is down 2% and could record further losses in the near term
• The Fed’s hawkishness weighs on the broader crypto market.

Privacy coins remain under pressure amid weak risk appetite

Monero (XMR) continued its downward trajectory on Friday as bearish sentiment persisted across the cryptocurrency market. 

XMR slipped for a third consecutive session, remaining below the $330 level. 

The broader crypto market came under renewed pressure following remarks from Federal Reserve Chairman Kevin Warsh during his first post-meeting press conference on Wednesday.

While the Federal Open Market Committee (FOMC) left interest rates unchanged, in line with market expectations, investors reacted negatively to the central bank’s hawkish tone. 

Policymakers emphasized their commitment to restoring inflation to the long-term 2% target, prioritizing price stability over near-term monetary easing.

Warsh’s comments suggested the Fed remains comfortable maintaining its current policy stance and is not yet considering interest-rate cuts. Market participants have even begun pricing in the possibility of another rate increase, with current expectations implying a 30% probability of a hike at an upcoming policy meeting.

Risk appetite weakened further as the Crypto Fear & Greed Index fell to 15 on Thursday from 22 a day earlier, keeping the market firmly in the “Extreme Fear” zone. The decline highlights growing investor caution and reduced exposure to risk assets.

Monero price outlook: Correction continues below key resistance levels

Monero remains trapped below the Bollinger Bands middle line near $340 and all major Exponential Moving Averages (EMAs). 

The 50-day EMA sits around $359, while the 100-day and 200-day EMAs cluster near $366, creating a significant resistance zone overhead.

Despite the ongoing correction, technical indicators show signs of improving momentum. 

The Moving Average Convergence Divergence (MACD) histogram remains positive, while the Money Flow Index (MFI) near 65 suggests steady capital inflows. 

However, these signals currently point to corrective rebounds rather than a broader trend reversal as long as XMR remains beneath key resistance levels.

Immediate resistance is located around the Bollinger Bands’ middle line at $340, followed by the 50-day EMA near $359. 

A stronger resistance zone emerges around $367, where the 100-day and 200-day EMAs converge. Beyond that, the upper Bollinger Band near $389 represents the next major hurdle for buyers.

On the downside, support is found near the lower Bollinger Band at approximately $291. A breakdown below this level could accelerate losses and trigger a deeper retracement despite the recent improvement in momentum indicators.

Monero remains vulnerable to further downside as macroeconomic uncertainty and restrictive monetary policy continue to weigh on investor sentiment. 

While technical indicators suggest some underlying buying interest, the privacy coins must reclaim key resistance levels before a more sustained recovery can take shape.