Monero (XMR) is flashing warning signs as its Short Term Bubble Risk index surges to 1.27, according to data released by Into The Cryptoverse on May 5, 2025. The index, which historically gauges price sustainability, now places XMR in the “Heating Up” zone — a level often linked to short-term market tops. With the chart shifting toward red, traders are taking note of the growing divergence between Monero’s rising price and its increasing risk profile.
The bubble risk tool has reliably flagged reversals in the past. Similar spikes, notably in 2017 and early 2021, were followed by extended corrections. Now trading above $140, XMR is flirting with levels where past rallies have fizzled, triggering more strategic caution among market participants.
Historical Patterns Point to Pullbacks After Peak Risk Readings
A review of historical data shows a consistent pattern: when Monero’s bubble risk exceeds 1.25, price reversals often follow. From 2014 through 2025, periods with such elevated readings typically marked exhaustion in upward momentum. The current index value of 1.27 mirrors the setup that preceded sharp corrections in earlier cycles.
The market’s memory of these trends is fueling a cautious tone. Traders who follow this index frequently wait for the risk value to fall below 1.0 before considering long positions. The risk-reward ratio now appears skewed, especially as broader crypto sentiment stabilizes rather than strengthens.
XMR Gains While Market Consolidates, Raising Questions
While Monero’s price pushes higher, the overall crypto market cap holds steady near $2.87 trillion. This contrast suggests XMR may be overextending relative to macro conditions. Analysts from World of Charts highlight the importance of this support zone for the wider market’s bullish structure. A breakdown below this level could have a cascading effect on altcoins like Monero.
The critical question remains: Can XMR maintain its upward momentum despite increasing risk pressure? With traders eyeing historical parallels and sentiment cooling, Monero faces a pivotal test of its resilience.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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