XMR Nears Peak Zone With Bubble Risk Metric At 1.27 Value

Monero price stays high while its short term bubble risk level moves past 1.25 and nears a danger point

The last time this level showed up XMR fell sharply and traders are now closely watching for a repeat

This risk reading signals that the market may soon react and traders are preparing for the next move

Monero (XMR) has entered a high-risk zone with its Short Term Bubble Risk index hitting 1.27, signaling a possible overheating. The latest chart shared by Into The Cryptoverse on May 5, 2025, shows a shift toward red-hot levels. Historical comparisons place the current level in a danger zone where previous peaks often preceded sharp corrections.

Source: X

The chart indicates that XMR is now in a “Heating Up” phase, with rising price action paired with a growing risk index. This bubble risk tool, calculated on historical price movement, has proven predictive of previous short-term reversals. Monero’s price currently hovers near a multi-year high, further intensifying trader attention.

This development arrives amid broader crypto market volatility, with total market cap holding around $2.897 trillion. Traders are increasingly evaluating high-risk assets like XMR for potential near-term reversals.

Historical Peaks Show Patterns of Correction

According to data from Into The Cryptoverse, past periods with similar risk index levels often led to strong pullbacks. When XMR’s risk metric previously surged above 1.25, prices experienced steep declines within weeks. The red and dark orange zones on the chart represent these critical risk conditions.

For example, in 2017 and early 2021, Monero’s price rose rapidly while the bubble risk crossed 1.5. Each case was followed by a downturn lasting several months. Current metrics show a near-identical climb in the bubble index, now sitting at 1.27, nearing that high-risk territory.

The chart's timeline from 2014 to 2025 also shows that values above 1.25 typically signaled exhaustion in upward momentum. As XMR’s price trends above $140 and risk continues to rise, cautious trading strategies are being adopted.

Traders using this index often wait for values to drop below 1.0 before accumulating positions. Present conditions suggest more caution than enthusiasm. Several responses under the tweet also indicate market participants are aware of potential cooling.

XMR Climbs While Broader Market Stabilizes

While Monero’s individual risk climbs, broader market conditions remain relatively stable but cautious. The total crypto market cap is testing the $2.87 trillion support range, as shared in a separate chart by World of Charts. Price action across major assets like BTC and ETH shows consolidation with low momentum.

This divergence between XMR’s rising price and increasing bubble risk suggests overextension may be forming. Historically, such setups have produced short-term tops followed by volatility. Investors watching XMR are now questioning how long this price strength can last under increased risk pressure.

World of Charts emphasized that the broader market must hold the $2.87T support zone to sustain bullish structure. If that level fails, correlated altcoins like XMR may also feel the impact. Traders are blending these signals to anticipate where the next major movement might emerge.

This brings attention to a pivotal market question: Can Monero maintain its gains amid rising bubble risk and cooling market sentiment?

Risk Sentiment Forces Strategic Re-evaluation

The rising Short Term Bubble Risk index has become a critical reference point for Monero holders and short-term traders. The index categorizes risk with a color-coded scheme, where blue represents low and red signals overheating. Currently, the index is trending toward red, alerting seasoned traders to consider exits or hedges.

As the index crosses 1.27, the visual correlation with past price tops adds weight to the cautionary outlook. Market memory often fuels reactions, and this chart shows multiple instances where elevated risk preceded selloffs. These tools serve as important metrics for understanding price sustainability in volatile environments.

With both technical indicators and sentiment aligning around elevated caution, market participants are watching closely for a shift in trend. For Monero to sustain its current path, it will need to avoid the typical patterns that follow rising bubble risk readings.