Monad (MON) has seen better days. After an impressive 51% surge between December 1 and 3, the momentum seems to be slipping away. A classic double top formation has emerged, signaling potential exhaustion among buyers. As big players retreat from their positions, the token appears to be losing its footing, inching closer to the listing lows last observed.
The signs are pretty clear: support is thinning, liquidity is dwindling, and all eyes may soon be on the crucial $0.028 level, which seems to be the last stand for Monad before it could dive deeper.
Double Top Signals Weak Demand
When it comes to price action, the double top formation is a significant signal of bearish sentiment. On the four-hour chart, Monad (MON) made its bid at the $0.033 mark twice but faced rejection both times. This trade pattern is often indicative of a reversal. The Chaikin Money Flow (CMF), a tool used to assess the money flow into and out of an asset, has also taken a dive, indicating that substantial buyers are retreating rather than seizing the opportunity to push upward.
Staying below zero on the CMF shows a clear lack of confidence from large investors. As this crucial indicator broke beneath its rising trendline, it painted a stark picture of dwindling demand from significant holders. Such behavior is alarming, marking the point where larger spot buyers are hesitating during a crucial moment of retesting. The risk here is evident: if big wallets reduce their buying pressure, the token’s rally loses its foundational support entirely.
Smart Money Index Reflects Hesitation
The Smart Money Index also underscores this sentiment. Attempting a rebound, it quickly pulled back and is now finding itself drifting toward its signal line. Typically, this index signals the entry points for large traders during short-term corrections, but the current lack of confidence suggests those opportunities may not materialize this time around. If the index slips below its guiding trendline, its implications for the token’s recovery could be severe.
The combination of a double top pattern, a declining CMF, and waning participation from smart money serves as a first line of pressure against the latest attempt at rallying for MON. Yet, these concerns originate from the spot market and don’t encapsulate the entire picture.
Liquidity Exit: Space Gets Tight for Traders
The pressure escalates when we analyze the derivatives market. Over the past week, significant trading groups have drastically reduced their perpetual futures exposure. Key players have been on the exit trail: the top 100 addresses cut their positions by 98%, while smart-money positions saw a reduction of 40.87%. Public figures trading in this space slashed their exposure by an eye-watering 80.52%, and even consistent perps winners—traders typically adept at timing trends—have reduced their positions by 66.37%.
This mass exit is not just a simple shorting strategy; it reveals a more profound intention to withdraw liquidity from the market. Most remaining positions are now net short, which signals a strong bearish momentum. With spot buyers easing off, smart money feeling dubious, and derivative liquidity evaporating, Monad sits vulnerably without the robust support needed to withstand any substantial sell-off.
Market Fragility Predicted Amid Exiting Traders
This landscape indicates a fragile state for the price of Monad. While it appears traders have all but retreated from aggressive trading, the ramifications are stark. Without adequate support, any larger sell orders could propel MON to depths not seen since its launch, signaling a critical moment to reassess market conditions as traders pull back across various fronts.
Key Levels Highlight Downside Potential for Monad Price
Currently, Monad is trading around $0.029, hovering just above a vital support level of $0.028 that has stood strong since December 2. Should this level crumble, a sharp decline toward $0.022 looms—a 25% dip from current levels. A break underneath this would reincarnate the post-launch lows around $0.020, echoing the price action seen shortly after listing on major exchanges.
For a change in trend direction into the bullish territory, the token would need to reclaim $0.038, a critical Fibonacci level that curtailed its earlier rally. A successful breach of this level could open up additional target points at $0.043 and potentially $0.049. Until such movement occurs, the sentiment continues to lean downward, driven by the collective exit of significant wallets, smart money, and declining derivatives participation.
What’s Next
The current landscape for Monad (MON) is fraught with caution. As large players continue to distance themselves from the market, the upcoming price action may hinge heavily on whether the critical support at $0.028 can hold. Traders and investors should keep a watchful eye on the market sentiment, as shifts in buying behavior could quickly tip the scales. Should the downturn persist, we may witness the re-emergence of past lows, begging a critical reassessment of MON’s future.
In conclusion, the coming days are likely to determine whether Monad stabilizes or slides further into lower territory. Understanding the broader market trends and trading behaviors now will be essential for navigating these turbulent waters successfully. For those delving deeper into the crypto space, researching crypto projects and keeping up with emerging trends could provide invaluable insights.
