MON Faces Critical Juncture: Technical Setup Points to Potential 64% Rally, Yet $50M Long Liquidation Risk Threatens Below Key Support

Monad (MON) is trading at $0.02, having lost 9.68% over the past day and slipping 10.58% over seven days. Despite the recent pullback, the token remains positioned above critical support, with the longer-term chart structure still intact. Compared to its post-launch peak of $0.05, MON sits considerably lower—yet the technical setup suggests bulls aren’t ready to surrender.

The Inverse Head and Shoulders Blueprint Holds Strong

The inverse head and shoulders formation continues to define MON’s near-term trajectory. This reversal pattern becomes actionable once price clears the neckline positioned near $0.024. Holding support at $0.020 has proven essential; breach this level and the pattern collapses.

The neckline breakthrough would trigger a textbook measured move toward $0.040, implying approximately 64% upside from current levels. For traders, this represents the bull case—but execution matters. A confirmed daily close above $0.024 is the prerequisite for this scenario to develop.

Recent price action has been constructive from a dip-buying perspective. Even with the 9.68% decline, buying interest has consistently defended the $0.020 support zone, keeping the breakout narrative alive.

Momentum Signals and Divergence Clues

The Money Flow Index (MFI) is sending mixed but potentially encouraging signals. Between late December and the end of the month, MFI traced higher highs while price moved lower—a classic bullish divergence. This pattern typically suggests accumulation beneath the surface and possible retail support building into weakness.

However, MFI remains critical to monitor. Should it dip below recent swing lows, dip-buying support could weaken materially. Conversely, if MFI moves above recent highs, it reinforces the bull thesis and strengthens the odds of clearing $0.024 resistance.

The current market behavior—with retail buyers doing enough to protect the $0.020 floor—maintains fragile bullish structure.

Derivative Markets Reveal Asymmetric Risk

While the technical pattern leans bullish, derivatives markets tell a different story about trader positioning and hidden risks.

On Hyperliquid’s 7-day MON-USD perpetual chart, long liquidations cluster around $93.62 million, while short liquidations rest near $45.26 million. This 100%+ imbalance toward long liquidations signals that traders are overwhelmingly positioned for upside moves.

This concentration creates a squeeze vulnerability. A breakdown below $0.020 would trigger a liquidation cascade affecting over 50% of accumulated long positions—approximately $50.34 million in cumulative long leverage sits in this zone. Such a move could force an accelerating liquidation event, potentially dragging price lower and compounding losses for leveraged longs.

The asymmetry suggests sellers may be waiting for $0.020 to fail before striking.

Two Paths Forward: Breakout or Breakdown

The market is essentially waiting for a binary decision at two critical levels.

Bull scenario: A decisive daily close above $0.024 activates the breakout. The $0.029 area would then serve as a momentum confirmation point, paving the way for the 64% target toward $0.040. Such a move would simultaneously liquidate major short clusters, further accelerating upside.

Bear scenario: Failure to hold $0.020 invalidates the inverse head and shoulders pattern entirely. This breakdown exposes the $0.016 level and turns the chart decisively bearish. It also triggers the long liquidation sequence, potentially making the move down self-reinforcing.

What Traders Should Watch

The $0.024 neckline remains the make-or-break level for the bullish setup. Above it, the structure remains intact and the 64% move becomes the working thesis. Below $0.020, the pattern breaks and risk/reward flips sharply against bulls.

Leverage traders should be particularly mindful of surge fees and liquidation dynamics on these key breaks. MON’s thin positioning means moves can accelerate quickly once key levels give way.

For now, MON remains balanced on a knife’s edge—pattern intact but barely, with outsized derivative risk lurking just below the surface.