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Monero Price Analysis: XMR Likely Headed to $400 Despite Network Reorg

Highlights:

  • Monero is trading at the $326.27 resistance after an earlier price spike
  • Rally comes despite network reorg
  • A push through the $326.27 resistance could push XMR to over $400

Monero (XMR) is in the green on a day that most cryptocurrencies are either in the red or relatively unchanged. At the time of going to press, Monero was trading at $5.06% to trade at $303.05.  Monero trading volumes have also shot up during the day. They are up by 78.8% to trade at $136.5 million in the day. 

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The rising volumes are an indicator that Monero bulls are gaining strength as more buyers enter the market. The increasing momentum for Monero comes as a surprise, given that Monero has, in the last 48 hours, gone through a network reorganization that many short sellers expected to shatter investor interest in Monero. 

Monero Faces A 43 Minute Network Reorg

The network reorganization happened between September 14 and 15, and saw the Monero mainnet reorg 18 blocks at around the 3,499,659 and 3,499,676 block heights in 43 minutes. The event has led to rising scrutiny on Qubic, a mining entity intensely involved in mining the Monero network. Given that Qubic controls a significant portion of Monero’s hashrate, some observers believe that the network reorg may have been driven by selfish interests, in a possible attempt at taking over 51% of the network.

Whether it was by design or not, the reorg has shaken confidence in Monero security. That’s because it is a clear indication that most of Monero’s mining power is concentrated in a few hands, which is the antithesis of cryptocurrency, especially a privacy-focused cryptocurrency like Monero. 

XMR Price Rises Despite Network Reorg

While the whole event was expected to tank the price of Monero, it had the opposite effect. The price of Monero rallied by over 7% and continues to trade at a higher percentage than most top 100 cryptocurrencies, most of which are in the red. Monero’s price action post reorg is so extraordinary that over $160,000 in XMR shorts were liquidated when the whole event was ongoing.

The unusual price action can be attributed to two factors. One of them is that the market has complete confidence in Monero and expects it to withstand and rise above such events. The second one is the fact that the Monero community has taken quick steps to remedy the problem. A number of proposals have already come up that could help make the Monero network stronger in the future.

Community Response Likely Contributing to Price Action

Among the considerations that the Monero community has brought up is a requirement for more confirmations before a transaction is finalized. The community is also considering using DNS checkpoints, even though this could come at the expense of giving up on some level of decentralization. The Monero community is also considering making adjustments to the protocol to make sure such network reorgs do not repeat in the future.

All these proposals are a plus for Monero’s long-term security and resilience. It may explain why the price rallied when short sellers expected it to tank. That’s because the exposed vulnerability, once remedied, is unlikely to repeat, further enhancing Monero’s standing among privacy coins and the cryptocurrency market in general. 

Technical Analysis – XMR Struggling at Critical Resistance

After a rally earlier in the day, Monero bulls have been firmly rejected at the $326.27 resistance. If bears take control, the key level to watch would be the $234.14 support. A correction through this support could see Monero drop to prices below $200.

XMR
Source: TradingView

On the other hand, if Monero bulls sustain momentum and push through the $326.27 resistance, then a rally to $417.4 could follow. Of these two scenarios, a rally to $417.4 is most likely, as the market has positively absorbed the Monero network reorg news.

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