Bitcoin (XBT) and its darker sibling, Monero (XMR), have had an interesting past few days, with XMR’s epic pump over the past 2 weeks after the announcement of inclusion in the DNM. XBT recently decided to wake up from its $565 – $580 range that it has been trading in and has pushed through the $600 barrier with good support behind it, rising above the 12H Moving Average.
The push up coincides with the drop on XMR of 33% from a high of $15 down to a local low of $10 over the weekend. That is, a lot of profit taking from XMR and back into XBT has happened. This however has been short lived, with XMR’s price recovering back to almost $14. The 6HR return correlation between XBT and XMR is -21% over the past 10 days.
Ethereum (ETH) and Ethereum Classic (ETC) have both taken a step out of the limelight with traders putting their cash towards XMR instead. Both altcoins are the worst performers in the above chart, giving a return/volatility figure half of what XBT has given.
Given the short-term negative correlation on XBT, traders should be wary for further moves ahead for XBT. The next resistance level tests are at $630, $650 and $680. If we see traders moving back into the King, XBT, then we may see more conversion from XMR resulting in a price decline.
BitMEX offers 10x leverage on XMR. Look for a short-term sell with tight stops in case we see a reversal of correlation.