Monero’s (XMR) impressive rally is likely to end at this level

Monero’s (XMR) impressive rally is likely to end at this level
Written by:
Michael Harris
1st October, 12:26
Updated: 1st October, 12:27
  • IRS announced two winners of its $625,000 bounty program to monitor transactions for privacy token Monero
  • Monero gained more than 15% in September to secure the highest monthly close in 15 months
  • The zone around the $115 mark offers huge obstacles for the buyers in the short-term

Monero (XRM) price rallied more than 15% in September to secure the highest monthly close in 15 months. This was possible due to an impressive rally yesterday, which yielded gains of 7.42%. 

Fundamental analysis: A bounty for breaking Monero’s protocol

Yesterday, the IRS announced two winners of its $625,000 bounty program to monitor transactions for privacy token Monero and Layer 2 protocols. The winners of the program are blockchain analytics company Chainalysis and Integra FEC.

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The IRS announced its search for a privacy-busting tracing tool at the beginning of September. Out of 22 received proposals, the government agency had picked two winners and the only reason the agency mentioned regarding its decision was “comparative analysis”, said an IRS representative.

“IRS-CI is seeking a solution with one or more contractors to provide innovative solutions for tracing and attribution of privacy coins, such as expert tools, data, source code, algorithms, and software development services,” IRS said in the official proposal, published a month ago.

Monero is a cryptocurrency often used by criminal organizations due to its low traceability. The IRS has previously said that XMR is being used for all future ransom calls and transactions by ransomware group Sodinokibi because of  its “privacy concerns.”

Chainalysis is one of the biggest crypto analytics companies and has won similar contracts before with other government agencies. On the other hand, Integra FEC is a less common firm, even though it controls millions of dollars in contracts with agencies like the Securities and Exchange Commission for “Other Scientific and Technical Consulting Services.”

The number of companies that do crypto tracing is likely to increase, given a surge in interest in this service among governments. A few weeks ago, the U.S. Treasury blundered with penalties on a Monero wallet that has proved to be a payment ID.

Technical analysis: Bulls facing big resistance block

Monero’s impressive bull run started in the first week of September after the digital asset moved to trade below the $75.00 mark. Since, the XMR buyers pushed the price movements above the $100 handle to finally print the 15-month high of $113.43 today. 

Monero price action daily chart (TradingView)

From the technical side, the buyers face strong resistance around these levels. A confluence of the Fibonacci extension lines – which are used to identify resistance and support levels beyond the point “1” – around the $115 mark offers huge obstacles for the buyers in the short-term.

A pullback is likely with the nearby support sitting at $106.

Summary

The IRS has named Chainalyis and Integra FEC as the winners of its bounty program to crack purportedly untraceable privacy cryptocurrencies like Monero and Layer 2 protocols. Monero’s bull run, on the other side, may be nearing its final phase. 

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