Ravencoin price plunged on Thursday and Friday after Ethereum’s merge event. The RVN token crashed to a low of $0.05, which was about 35% below the highest level this week. According to Binance, it was among the worst-performing cryptocurrencies in its ecosystem.
Why did RVN price crash?
Ravencoin is a small but fast-growing cryptocurrency that was created to solve some of the challenges that exist in Bitcoin.
As I wrote earlier this week, Ravencoin was created by simply tweaking Bitcoin’s code. As a result, instead of having a supply limit of 21 million coins, Ravencoin has 21 billion. This means that the coin is not as congested and as expensive as BTC is.
Ravencoin is a proof-of-work (PoW) cryptocurrency. As such, the coin made substantial gains recently as investors and miners moved from Ethereum. Ideally, the price of most PoW coins jumped sharply towards Ethereum Merge.
As we have written before, Merge transitioned Ethereum from a proof-of-work cryptocurrency to a proof-of-stake coin. Therefore, this transition meant that Ethereum miners were left without much to do. As such, they moved to other coins like Ravencoin.
Therefore, Ravencoin price is crashing because of a situation known as buy the rumor and sell the news. RVN rose ahead of the merge and then crashed after the situation happened.
This view is supported by its mining hash rate. According to 2Miners, Ravencoin’s hash rate soared to more than 23 TH/s before the merge. Now, it has dropped to 18.45 as activity in the ecosystem ease. Other proof-of-work coins that jumped ahead of merge like Ethereum Classic and Firo have also pulled back sharply in the past few days.
Another reason why RVN price has plunged is that cryptocurrency prices have a close correlation with each other. And today, most coins like BTC and ETH have all crashed.
Ravencoin price prediction
The daily chart shows that Ravencoin price was in a bullish trend towards The Merge. It then declined sharply as investors sold the fact. Still, the coin remains above the important support levels at 25-day and 50-day moving averages. It is also above the important support level at $0.043, which was the highest point on August 1.
Therefore, I suspect that the coin will have a break and retest pattern, where it retouches the support at $0.043 and then resumes the bullish trend. If this happens, the next key resistance level to watch will be at $0.15.
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