In a significant turn of events, the privacy-focused cryptocurrency Monero (XMR) surged to a near two-month high of $333 early on Monday, despite facing a serious challenge with an 18-block reorganization (reorg) that reversed over 100 transactions on its blockchain. This incident has raised questions about centralization concerns associated with proof-of-work blockchains, which can lead to vulnerabilities like tampering of records.
While Monero experienced this rise, Bitcoin struggled to maintain its momentum, trading lower after failing to surpass the $116,000 threshold over the weekend. Large investors, often referred to as “whales,” appeared to be reallocating their funds towards Ethereum instead. Consequently, the broader cryptocurrency market surrendered its recent gains, with the CoinDesk 20 Index dropping to 3,239 points, reflecting a decline of over 3% within a 24-hour period.
On the derivatives front, there has been a notable decline in open interest (OI) among the top 25 cryptocurrencies over the past day. Memecoins, including DOGE, PEPE, and FARTCOIN, witnessed significant capital outflows, contrasting sharply with the pre-Fed bounce observed in many other tokens. Bitcoin’s global futures OI has reverted to 720,000 BTC from a near-record high of 744,000 BTC reached the previous week. Total market-wide OI fell from $95 billion to approximately $90 billion over the weekend.
Ethereum, however, saw an increase in its futures OI, rising to over 14 million ETH from about 13.2 million early in the month, suggesting renewed capital inflows. Yet, the cumulative volume delta (CVD) normalized by OI indicates a negative trend in net selling pressure over the past 24 hours, reflecting a challenging environment for most major tokens.
Interestingly, activity in CME-listed futures has picked up, with Bitcoin OI bouncing to 141.69K BTC from a multimonth low of 133.25K BTC. Nevertheless, the annualized rate on a three-month basis remains below 10%, signaling ongoing consolidation. Ethereum’s CME OI continues to hover below 2 million ETH.
On Deribit, the outlook in terms of put bias for Bitcoin and Ethereum has significantly eased across various tenors as market participants anticipate potential Federal Reserve rate cuts in the forthcoming months. The implied volatility term structure remains in contango, suggesting expectations for increased volatility leading up to the December expiry.
Turning back to Monero, the blockchain’s recent reorganization marked its deepest ever rollback of 18 blocks, a process that requires nodes to abandon a portion of the existing chain in favor of a longer chain with greater proof-of-work. This temporary fork saw two versions of the chain competing for dominance. Despite this upheaval, XMR’s price rallied by 5%, even as Qubic, a layer-1 AI-focused blockchain and mining pool, attempted to seize control of Monero by amassing 51% of the mining power last month.
The reorg rewrote approximately 36 minutes of transaction history and rendered around 118 confirmed transactions invalid, prompting security concerns regarding the Monero network. A cryptocurrency podcaster, xenu, suggested that Qubic’s reorg may have been a strategic move to “stop the bleeding” of XMR’s price, which had previously plummeted from $344 to $235 during an earlier 51% attack in August. Despite these challenges, XMR currently trades at $304, showcasing a resilience that has driven daily trading volumes up by 78%, reaching $136 million.
