Monero sees $54M perpetual inflow: Will liquidity clusters trigger XMR’s pullback?

The privacy cryptocurrency, Monero [XMR], wasn’t exempt from the market run in the past 24 hours, as the asset rallied 13% at press time, while staying atop the gainers within its sector over that period.

The gain has largely been an effect of the rise in long positions in the perpetual market. The Funding Rate of XMR rose significantly into positive territory, while the Perpetual Open Interest (OI) saw more capital inflow.

Funding Rate measures whether there are more long or short positions in the market relative to the OI, which provides data on the capital available in the asset’s perpetual contracts.

The Funding Rate in the market had risen significantly, reaching roughly 0.1683% on the chart, which marked the highest level since September 4 and shows the strength of the bulls in the market.

Adding to the outlook, OI within that period rose by 18%, reaching $305 million, according to details from CoinGlass. To put it in perspective, that’s roughly $54.9 million in new capital inflow that came into the perpetual market in the past 24 hours.

These inflows play a key role in influencing prices to surge higher, and if sustained without becoming overheated, there’s a high chance that XMR sustains the level and climbs higher.

Liquidity clusters point to a potential XMR pullback

The expectation based on price performance is that there’s a high chance a pullback occurs in the market based on analyzing price clusters.

Price clusters mark areas on the chart with unfilled long or short orders. The 1-month heatmap shows unfilled liquidity clusters below the current price, which could pull XMR lower.

Compared to the top, which carries little to no liquidity clusters above the present price level. The major concern remains that liquidity clusters act as a magnet, pulling price towards them and forcing it to drop in the near term.

If the pull happens, there’s a high chance that XMR sees a pullback, yet that would depend on momentum. Currently, the momentum shows bulls have the edge, and price would likely trend further higher in the near term.

Weakening CMF impacts bullish Aroon outlook

The Chaikin Money Flow, a volume-weighted indicator that tracks whether there is accumulation or distribution based on the position on the chart, shows a complex situation.

The CMF remained positive, but its decline shows that traders have been distributing the asset over the past day. At the time of writing, the CMF showed a reading of roughly 0.03 on the chart while pointing downwards.

In addition, the Aroon Indicator, which tracks whether the bulls or bears are in control, shows that the former is the case. Yet, it isn’t completely bullish as the Aroon Down has a significantly elevated reading of 64.29%.

Ideally, the gap between the Aroon Up and Aroon Down in a significantly bullish market condition should be 100% to 0.00%, respectively. The more the Aroon Down drops while the Aroon Up stays pegged at 0.00%, the higher the chance that price could surge even higher.

Final Summary

• XMR’s rally is supported by rising Funding Rate and Open Interest, with roughly $54.9 million flowing into the perpetual market over the past 24 hours.

• Liquidity clusters and weakening Chaikin Money Flow create downside risks, although Aroon readings show bulls still have the upper hand.