ETHW has logged a significant price rebound despite its blockchain network, ETHPoW, suffering a smart contract hack in the first week after its launch.
The short analysis of the attackhttps://t.co/87OVRqaYb2 https://t.co/vhRJyZVc72
— BlockSec (@BlockSecTeam) September 18, 2022
Bull trap risks surround ETHW market
ETHW rebounded more than 150% eight days after the attack and tred for around $10.30 on Sept. 27.
Fundamentally, this suggests that trers ignored the hack and trusted ETHPoW’s long-term viability as a blockchain project.
But from a technical perspective, the ETHW price rally has accompanied weaker tring volumes. In other words, fewer trers have been involved in the pumping of the ETHPoW token’s price in the past eight days, as the Bitfinex exchange data shows in the chart below.
ETHW/USD daily price chart. Source: TringView
The growing divergence between ETHW’s rising prices and falling tring volumes suggests that trers’ interest in the ETHPoW token has been dwindling. In other words, ETHW’s price risks a sharp correction in the coming days.
Related: Dogecoin becomes second largest PoW cryptocurrency
This “bearish divergence” setup is supported by a descending trendline that has served as resistance for ETHW since Sept. 2.
On the four-hour chart below, trers have shown their likelihood of dumping their ETHW positions near the said resistance. Moreover, even the token’s latest pullback move on Sept. 27 has originated near the same trendline, raising the possibility of an extended price correction.
ETHW/USD four-hour price chart. Source: TringView
As a result, ETHW’s short-term technical bias is skewed toward the bears. So, if its correction extends, the PoW token risks falling into the $8–$9 price range, which also coincides with ascending trendline support, or a 25% drop from current price levels.
ETHPoW hash rate recovers
On a brighter note, the ETHPoW’s network hash rate has recovered significantly since the smart contract hack, rising from 29.44 TH/s on Sept. 19 to 48.48 TH/s on Sep. 27. Although, the current hash rate is still down about 40% from its record high of 79.42 TH/s.
ETHPoW hash rate performance since launch. Source: 2miners.com
Still, a rising hash rate means more miners have joined the ETHPoW network after its split from the Ethereum proof-of-stake (PoS) chain on Sept. 15. In theory, it should ensure better protection against potential 51% attacks.
Simultaneously, ETHPoW has witnessed a growth in its network’s total valued locked (TVL). As of Sept. 27, ETHPoW h 66,548 ETHW deposited across four decentralized exchanges functioning atop its blockchain compared to nearly 38,000 ETHW three days prior, or a 75% increase in the last three days.
ETHPoW TVL as of Sep. 27, 2022. Source: Defi Llama
Interestingly, UniWswap, a fork of the Ethereum blockchain-based decentralized exchange Uniswap, comprises more than 50% of the ETHPoW chain’s TVL.
DApps functional atop ETHPoW chain. Source: Defi Llama
Other DApps include PoWSea, a nonfungible token ( marketplace, as well as exchanges PoWSwap and HipPoWSwap.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and tring move involves risk, you should conduct your own research when making a decision.
META ARTICLE: Ethereum fork token ETHPoW climbs 150% after smart contract hack — A fakeout rally? PUBLISHED: 2022-09-27 13:10:00 SOURCE: https://cointelegraph.com/news/ethereum-fork-token-ethpow-climbs-150-after-smart-contract-hack-a-fakeout-ethw-rally