Monad at the Crossroads: $0.024 Breakout Could Unlock 64% Rally Amid Liquidation Minefield

Current Situation

Monad (MON) is testing critical technical territory at $0.02, down 3.49% in the last 24 hours and off 14.99% over the past week. Despite this recent weakness, the token remains elevated compared to early cycle levels—though still 60% underwater from its $0.05 peak. The setup matters more than the daily noise here. A technical pattern is forming that could either ignite significant upside or trigger cascading losses for leveraged traders.

The Inverse Head and Shoulders: Bullish Structure on Life Support

Monad’s chart is holding an inverse head and shoulders reversal pattern—a formation that typically signals the end of a downtrend. The pattern’s validity hinges on a single breakout point: the neckline at $0.024.

Support has established at $0.020, creating a narrow range. A decisive daily close above $0.024 would confirm the reversal is active. If validated, the measured move targets $0.040, implying a 64% surge from breakout levels. This is the bullish thesis.

What’s keeping this alive? The Money Flow Index (MFI) has been sending mixed signals. While price declined between late December and early January, MFI printed higher lows—a classic bullish divergence suggesting retail accumulation during dips. Small buyers are defending the support zone, enough to keep the pattern from invalidating.

However, the divergence only works if MFI holds above recent swing lows. A breakdown there weakens conviction materially.

The Hidden Risk: $50 Million in Long Liquidations Below Support

Here’s where the pattern gets dangerous. Derivative markets on Hyperliquid tell a cautionary tale. The 7-day MON-USD liquidation map shows a pronounced long bias—over $93 million in long liquidations stacked near key levels, compared to just $45 million in short liquidations. Long positioning exceeds short positioning by more than 100%.

Translation: The market is positioned heavily for upside, creating fragility.

The squeeze risk becomes acute below the $0.020 support level. A close beneath it would trigger a liquidation cascade affecting over half the long cluster concentrated there. That cluster contains approximately $50 million in cumulative leveraged long positions. Once liquidations begin, they often accelerate, potentially dragging price down rapidly as forced sellers hit the market simultaneously.

The floor could drop further to $0.016, where the pattern would break entirely and shift the chart back to bearish control.

Leverage Dynamics: The Two-Way Trap

This setup favors neither side equally. A clean break above $0.024 would liquidate significant short positions, likely confirming upside momentum toward $0.029 and beyond toward $0.040. That scenario validates the pattern and gives bulls the space to run.

Conversely, sellers appear to be laying in wait for a $0.020 breakdown. If that trigger fires, liquidation mechanics work against longs rather than shorts. The market becomes a one-way door downward until all forced sellers are flushed out.

Price Levels That Matter

• $0.024: The breakout point. Above this confirms the reversal is alive.
• $0.029: An intermediate confirmation zone. Strength here suggests $0.040 is reachable.
• $0.020: The critical support holding the pattern together. Loss here starts the unraveling.
• $0.016: The breakdown target where the entire inverse head and shoulders structure invalidates.

The Bottom Line

Monad is pinned between two outcomes. The technical setup leans bullish—barely—because the inverse pattern, MFI divergence, and dip-buying activity are still functioning. A break above $0.024 opens the door to meaningful upside and liquidates short sellers. But that move must happen convincingly, or the market risks a violent washout when leverage finally unwinds.

Right now, the neckline is the battle line. Whoever controls $0.024 controls whether Monad rallies or crashes into its liquidation minefield below.