Monero Price Analysis: Bearishness Persists as Hash Rate Plunges Post-Hard Fork
- The Monero (XMR) price on Sunday is holding minor gains but is moving within a bearish pennant pattern structure.
- While the Monero team completed a successful hard fork, hash rate plunged following the upgrade.
XMR/USD: Recent Price Behavior
Monero’s price continues to move within a narrowing nature; there is yet to be a firm committed direction for 2019. XMR/USD has been ranging since December 2018 after the price settled from the yearly low print. Whenever bulls have pressed higher for a near-term run, the bears quickly swoop in and sell those rallies. So far this year, upside has proven to be unsustainable.
Given the above-detailed price behavior, XMR/USD has formed a horizontal wedge pattern structure. The technical formation could also be viewed as a bearish pennant, as the price consolidates after the strong selling triggered in November 2018. Given the extreme narrowing of the price action, a breakout may be expected sometime soon.
Monero Completes Successful Hard Fork
Monero recently completed a successful hard fork, which was activated on block 1,788,000. The network upgrade was designed to offer several new improvements, such as a new weighted block algorithm and a more efficient RingCT format that was integrated on Saturday.
The tweaks to the proof-of-work algorithm were to make it higher with ASIC-resistance, which represents important changes to mitigate big bang attacks and enhanced transaction homogeneity to improve privacy even more. As previously reported, the network is overrun by ASIC miners – a trend that facilities the risk of centralization. As a result, it makes the network more prone to the 51% attack.
In terms of the latest hard fork, it implemented the CryptoNight-R algorithm, which will disable all the ASIC mining software code. Therefore, it will assist in preventing future mining through ASIC chips. Now, after this hard fork, miners will have to update their mining software and equipment.
Despite the successful upgrade, the hash rate of the Monero network has taken a severe hit due to the curbing of ASIC mining. Some of the community members have reported seeing the hash rate dropping as much as 90%.
Further reading: The Long-Term Bullish Case for Monero (XMR).
Technical Review – XMR/USD
XMR/USD is very much heading towards the end of the pennant pattern, indicating an imminent breakout. Immediate resistance can be seen tracking at the upper trend line, $54.00. In proximity, an area of supply is presently ranging from $54-60. The price has not traded comfortably above this region since the back end of 2018. Should the bulls manage to force a push above, then another wave of buying pressure would be expected. Further to the upside, $80-$95 would likely be of interest for the bulls.
Lastly, with regards to support, the lower acting trend line of the pennant can be seen tracking at $46. If the bears breach this then it could be extremely punishing. As such, eyes will be on a retest of the 2018 low, $38.25.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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