Key Insights:
- From an impressive parabolic XMR price move to a massive retracement, Monero price loses more than half of its gains made in the first half of January.
- A look at the key reasons behind the Monero price retracement.
- Why XMR price retracement could be a normal correction in the privacy coin’s long-term parabolic move.
Monero (XMR) price has retreated by more than 40% since mid-January, making it one of the biggest losers among the top coins by market cap. A complete U-turn, considering that it was one of the most bullish coins in the first half of the month.
Monero price initially achieved a 90% plus rally from 1 January to 15 January. This performance almost allowed it to join the top 10 list of cryptos by market cap. It also signaled heavy interest in privacy coin.
The move was also fueled by heavy liquidity exit from Zcash after developers exited the project. This allowed XMR to regain its position as the top privacy coin. Monero price has since lost almost all the gains that it achieved earlier this month. As a result, investors are now more uncertain about its fate.
Here’s Why Monero Price Has Been Bearish Since Mid-January
There were multiple reasons why XMR price gave up some of its gains from the first half of January. The privacy coin was already deep in overbought territory, meaning investors were more likely to take short-term profits at the next sell-off signal.
That signal came in the form of a sharp drop in market sentiment since mid-month. This was largely due to the macro factors such as rising geopolitical tensions and rising bond yields.
Consequently, liquidity flows out of risk-on assets favored the bears. Monero investors jumped onto the opportunity to save their recent gains, hence contributing to sell pressure.
According to Coinglass, Monero crypto had heavy spot outflows last week. The highest spot sell pressure it has experienced in the last 12 months.
Interestingly, Monero price leveled out in the last 2 days as market sentiment cooled slightly. This means its retracement was heavily influenced by external factors that impacted the overall crypto market as a whole.
The bearish event also led to heavy losses in the derivatives segment. XMR price just concluded one of its most bearish weeks in recent history. Open interest soared to $279 million, its historic high before the recent crash, but has since cooled to $217 million.
These findings also mean Monero bulls may still make a comeback once bullish market conditions resume. The cryptocurrency was already on a steady uptrend in the last 5 months of 2025, and could still be headed for the $1,000 price tag this year.
What to Expect After the Monero Price Retracement?
The unique circumstances that fueled the XMR price rally in the first half of January may offer insights into where the privacy coin is headed.
Monero price previously demonstrated a long-term parabolic move underpinning its lows. The retracement in the last few days brought its price close to retesting the same parabolic curve.
The same parabolic move suggests that Monero may embark on recovery in the coming months, especially if market conditions allow.
It almost touched the same curve after the pullback this week. This may signal that demand is about to make a comeback, though the recovery may be less enthusiastic this time.
