tl;dr
Monero (XMR), a leading privacy coin, has plunged nearly 25% over the past month, making it the third-worst performer among the top 100 cryptocurrencies by market cap. The decline is driven by Qubic, a rival blockchain project, gaining majority control (over 51%) of Monero’s hashrate, raising fears ...
The majority of the crypto market is celebrating gains today, yet Monero (XMR), the leader among privacy coins, is caught in a storm, plunging nearly 25% over the past month and ranking as the third-worst performer among the top 100 cryptocurrencies by market cap. While other privacy coins like Zcash, Dash, Starknet, and ZKSync maintain bullish trends, XMR has continued its downward spiral, dropping more than 7% in the last 24 hours to $251.35.
This severe selloff stems from mounting pressure due to a rival blockchain project, Qubic, accumulating majority control of Monero’s hashrate. Such dominance over mining power implies control over the Monero network, sparking uncertainty and fear among XMR holders. As a result, Qubic surged in price while Monero experienced a dramatic crash, breaking several long-held support levels and erasing gains from the summer rally. Currently, XMR’s losses extend over 25% weekly, marking its lowest levels since May and matching some of the steepest drops due to past regulatory fears.
The heart of the crisis is Qubic's claim of securing over 51% of Monero’s global hashrate, an unprecedented milestone that could enable them to reorganize blocks, censor transactions, and perform double-spends. Such a 51% attack is one of the most fundamental threats to proof-of-work blockchains, as majority control allows an entity to manipulate blockchain consensus, effectively rendering the network unreliable.
Monero’s RandomX algorithm is designed to resist ASIC mining and maintain decentralization by favoring CPUs and GPUs. However, Qubic employs a unique “useful proof-of-work” system that incentivizes Monero CPU mining to power its own token economy. By converting mined XMR into stablecoins and burning QUBIC tokens, the project creates economic motives that draw miners to its centralized operation. This strategic economic incentive blurs the line between a conventional attack and a sophisticated business maneuver, causing debate in the crypto community.
Sergey Ivancheglo, Qubic’s founder, counters allegations by claiming the move aims to help Monero prepare for future threats rather than destroy it. Nevertheless, indicators of network instability are significant; Monero has seen 60 orphaned blocks recently, and experts warn the network appears to be undergoing a successful 51% attack, citing substantial chain reorganizations.
From a price perspective, Monero faces a bearish outlook. The token trades decisively below critical support levels, with technical indicators signaling continued selling pressure. The Relative Strength Index sits at 25, indicating oversold conditions but tempered by ongoing fears that may prolong the downward trend. Meanwhile, the Average Directional Index at 29 confirms strong bearish momentum.
Despite some misleading bullish signals from exponential moving averages, with XMR trading below its 50-day EMA and nearing its 50-week EMA, the fundamental threat of the 51% attack heavily weighs on its valuation. A successful attack could deeply undermine Monero's core privacy value. However, a network defense or a fork might restore confidence and revive bullish momentum, potentially pushing prices above $300 in the medium term.
For traders, the immediate support lies at $240, with stronger technical support around the $220-$225 range. Resistance levels to watch include $270, now acting as resistance after being broken support, and the $290-$300 zone, where the 50-day EMA converges with psychological barriers. Whether Monero rebounds or continues its slide hinges on network developments and the broader community’s response to this unprecedented test.