Monero’s 35% Rally Faces Long-Squeeze Risk — But That’s Not the Only Threat

The Monero price has surged more than 35% over the past seven days, adding another sharp leg higher in the last 24 hours alone. The move pushed XMR to a fresh all-time high near $598 before sellers stepped in, leaving the price hovering just below the price discovery zone.

While the trend still looks strong on the surface, multiple underlying signals suggest the rally may be entering a fragile phase. The key question now is whether Monero is consolidating before another push higher. Or, whether growing imbalance beneath the surface is setting the stage for a sharper shakeout.

Capital And Momentum Risks Explain Why Selling Pressure Hit At The High

Monero’s breakout from its ascending channel confirmed trend strength, but indicators are no longer perfectly aligned with price.

Chaikin Money Flow, which measures large capital flows, remains above zero, indicating that accumulation remains intact; however, CMF has trended slightly lower while price moved higher between mid-December and mid-January. This divergence explains why selling pressure appeared immediately after the all-time high, rather than the price accelerating further.

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At the same time, RSI, or the Relative Strength Index, which measures momentum, has pushed into overbought territory. The last time RSI reached similar levels was in early November, just before Monero corrected by roughly 33% despite the broader uptrend remaining intact. That historical setup does not guarantee a repeat, but it clearly defines risk when momentum becomes stretched at key highs.

This raises a critical question: if momentum is flashing caution, what is still driving buyers to stay aggressive?

Sentiment And Spot Flows Are Strong — But Are They Creating A Trap?

Monero’s rally has been heavily sentiment-driven. Positive social sentiment surged from roughly 11.6 in late December to above 60 by January 11, a rise of more than 400%. That spike closely mirrors the recent price acceleration, showing that attention and narrative have played a major role in pushing XMR higher.

Spot flows support this view. Exchange outflows, which signal net buying, have more than doubled in a span of a few days. From $1.06 million earlier in January to roughly $2.73 million recently, even with a few brief inflow days in between. This confirms that buyers are still active, primarily with the sentimental trigger at play.

However, sentiment peaked in early November at slightly higher levels than today, right before the price corrected sharply. The current sentiment peak is lower. Yet, the similarity in structure brings back a clear historical memory (highlighted by the RSI earlier). Strong sentiment can fuel rallies, but it can also mark local exhaustion when combined with overheated momentum.

That leaves one final layer to examine: positioning risk.

Long Positioning Skews Risk Lower If The Monero Price Slips

Derivatives data shows that long positioning is heavily crowded. Over the next 30 days on Bybit alone, cumulative long liquidation leverage sits near $22.1 million. The short liquidation leverage is closer to $5.4 million. That more than 4x imbalance means downside moves for XMR can accelerate quickly (long squeeze) if the price loses key support levels.

The first pressure point sits near $554 (align with the point where long liquidations begin). A break below that level opens the door to long liquidations toward $502 and $454. In a deeper unwind, a move toward the $411 region becomes mechanically possible, even without a broader trend reversal.

On the upside, Monero needs a clean daily close above the $593–$598 zone to neutralize liquidation risk and reset momentum. Until that happens, strength remains real, but increasingly fragile.