Monero (XMR) may enter a deep correction phase when the upward momentum weakens at the $800 mark.

Monero (XMR) experiences a slight correction during Friday’s trading session, retreating to around $700 at the time of writing, as the rapid rally cools down after breaking through the all-time high of $800 in the previous session. This development raises concerns that the bullish cycle may be nearing its end. Data from the derivatives market show that risk-averse sentiment is spreading within the trading community, potentially exerting downward pressure on spot market demand. From a technical perspective, XMR also begins to signal a deeper correction, with the possibility of falling back to the $640 support zone as investors intensify profit-taking after the strong upward move.

Derivatives XMR signals weakening

Monero continues to maintain its bullish tone as the wave of interest in privacy coins has dominated the market over the past two months. However, the recent correction of XMR appears in the context of the CLARITY bill being delayed, which triggers a defensive and cautious sentiment across the entire cryptocurrency market.

According to data from CoinGlass, the open interest (OI) of XMR has plummeted over 11% within 24 hours, down to $267.27 million. This decline reflects a narrowing of the nominal value of derivative positions, indicating traders are actively reducing leverage or closing positions, weakening demand for Monero-related derivative products.

During the same period, the total liquidation value of short (Short) positions reached $3.36 million, nearly three times the $1.48 million liquidated long (Long) positions. However, the picture reversed in the last 12 hours, with long position liquidations surging to $1.20 million — about five times higher than the $239,170 in short liquidations — indicating profit-taking pressure and a selling trend gradually taking over.

Nevertheless, demand for this privacy coin has not completely disappeared. The weighted funding rate based on open interest remains steady around 0.0149%, indicating that long positions are still willing to pay fees to maintain their positions, while also increasing the risk of further long position liquidations if the correction pressure continues.

Derivatives data of XMR | Source: CoinGlass## Weak momentum restrains Monero’s upward trend

At the time of writing on Friday, XMR experienced a correction of over 1%, officially ending a 7-session rally. The coin is currently trading around $700, showing signs of exhaustion after multiple failed attempts to break through the key resistance level Pivot Point R4 at $711. On the daily logarithmic chart, long upper shadows on candles clearly reflect increased profit-taking pressure at higher prices.

In a negative scenario, if XMR closes in red, the short-term correction could continue, pushing the price back to the Pivot Point R3 zone around $640 — the nearest support level and the immediate correction target for the bears.

Daily XMR/USDT chart | Source: TradingViewHowever, the overall technical picture on the daily timeframe still leans towards an uptrend. The 20-day EMA at $527 remains well above the 50-day EMA at $463 and the 200-day EMA at $366, maintaining a clear bullish structure. As long as the price trades significantly above these moving averages — which serve as important dynamic support zones — the short-term trend remains positive.

Meanwhile, the MACD indicator continues to stay above the signal line, with both lines in positive territory. The positive histogram expansion indicates that the bullish momentum has not weakened and is still being reinforced.

However, the RSI currently stands at 83, deep into the overbought zone. This suggests a short-term correction risk, as the market may enter an accumulation or technical correction phase to relieve the overheating pressure.

Conversely, if XMR can convincingly close above $711, the bullish momentum is likely to be reactivated, opening room for a move toward the psychological level of $800 in the near future.