Crypto Privacy Coins Are Surging: Can the Momentum Continue?

Privacy Coins Experience Unprecedented Surge

Privacy-focused cryptocurrencies are witnessing a level of momentum not seen in years. Monero has soared by 54% over the past week, while Dash recorded a remarkable 39% gain in just one day. This sudden outperformance has propelled the privacy coin sector ahead of other segments in the crypto market.

Will this momentum persist?

What Sparked the Rally?

The initial spark can be traced back to late September last year, when traders began to focus on Zcash (ZEC). Unlike mainstream cryptocurrencies such as Bitcoin and Ethereum, privacy coins are designed to obscure transaction details and wallet origins, making tracking nearly impossible.

In October, Naval Ravikant, entrepreneur and founder of AngelList, commented on social media: “Bitcoin is insurance against fiat. Zcash is insurance against Bitcoin,” urging investors to reconsider the transparency offered by digital assets like Bitcoin. This statement fueled further interest in privacy coins, with ZEC approaching an eight-year price peak in early November.

More recently, Monero reached new record highs, surpassing $667 per coin. As the rally intensified, traders who missed the initial surge began searching for the next privacy-focused opportunity.

Regulatory Developments Add Complexity

Beneath the surface, several factors are contributing to the surge. The European Union’s DAC8 directive, effective January 1, 2026, now requires crypto service providers to collect user tax information, reigniting the debate over privacy as a core feature of digital assets.

Meanwhile, Dubai’s Financial Services Authority has implemented updated regulations in the Dubai International Financial Centre, explicitly banning privacy tokens from trading, promotion, fund activities, and derivatives. The new rules also prohibit regulated firms from using mixers, tumblers, or other privacy-enhancing tools.

These regulatory moves have coincided with the rally in privacy coins. Rather than dampening enthusiasm, the restrictions have heightened volatility and, in this case, fueled bullish sentiment—many traders interpret the bans as evidence of privacy’s growing importance.

The Zcash Shakeup

Zcash’s journey took a dramatic turn as the year began. After a strong finish to 2025, ZEC entered 2026 in turmoil when the entire Electric Coin Company development team resigned on January 7, citing “constructive discharge” by the board. CEO Josh Swihart accused several board members of diverging from Zcash’s mission.

The team is now forming a new company and launching a wallet called cashZ, but the fallout has been significant: ZEC has dropped roughly 50% from its recent highs.

Capital Rotation: Monero and Dash Benefit

This upheaval has prompted privacy coin investors to shift their capital. Monero, with its decentralized structure and absence of a central development authority, has become the primary beneficiary. Dash, trading at lower absolute prices but offering similar privacy features, has attracted those seeking higher volatility after Monero’s initial surge.

Despite Zcash’s troubles, prediction markets remain optimistic. On Myriad, traders give ZEC nearly a 53% chance of rebounding to $550 before falling to $250.

For those who rely on sentiment analysis, this could signal a potential buying opportunity. Technical traders, however, may prefer to wait for further confirmation before entering new positions.

Market Context: Bitcoin’s Stability Supports Altcoins

Bitcoin is holding steady above $92,000, and the broader crypto market has shifted into a risk-on environment. Privacy coins rarely rally in isolation, but when Bitcoin is stable and altcoins are gaining traction, conditions are ripe for capital to rotate into higher-beta sectors like privacy coins.

Dash: A Classic Short Squeeze

Dash has surged nearly 39% today, climbing from an opening price of $39.44 to $54.77, with an intraday peak at $69.92 before encountering selling pressure. This marks the largest four-hour price movement since October 2025. The rapid move was driven by a short squeeze—trapped short sellers were forced to buy back, pushing prices higher and triggering additional stop orders in a cascading effect.

The Relative Strength Index (RSI) for Dash stands at 68.2, indicating strong momentum but not yet reaching overbought territory (above 70). Typically, RSI readings above 70 suggest that a correction or profit-taking may be imminent, which likely contributed to the pullback after today’s high.

The Average Directional Index (ADX), which measures trend strength, is at 14.2 for Dash. An ADX below 25 signals a weak trend, suggesting that the recent spike has diminished bearish momentum but a new trend has yet to fully establish itself.

Examining the exponential moving averages (EMAs), Dash’s 50-day EMA remains below its 200-day EMA—a bearish configuration that indicates the longer-term trend has not yet reversed, despite today’s rally.

Dash is now testing resistance between $55 and $60, an area that previously served as a consolidation zone in November 2025. Bulls will need to decisively break through this barrier to confirm a sustained uptrend.

What’s Fueling Dash’s Fundamentals?

Beyond capital rotation from Zcash, Dash recently partnered with Alchemy Pay, enabling fiat access in 173 countries via 300 payment channels. The upcoming launch of the Evolution platform in Q1 2026 is also generating speculative interest. While these developments may not be transformative on their own, they are significant for a coin with Dash’s market size.

However, today’s rally is primarily the result of derivatives-driven short covering. If spot market demand fails to absorb the move, a sharp reversal could follow.

Privacy coins have long faced challenges such as limited exchange listings, increased regulatory scrutiny, and patchy liquidity. When demand surges, prices can move rapidly due to the shallow depth of the market, amplifying volatility.

Key Levels for Dash

• Resistance:
  • $60 (immediate/psychological)
  • $80 (November 2025 highs)
• Support:
  • $40 (breakout level)
  • $37 (200-day EMA zone)

Monero (XMR): Entering Price Discovery

Monero is currently leading the privacy coin rally. XMR opened at $631.41, reached a high of $695.98, and is trading at $667.78—up 5.65% today and 54% over the week. The coin has broken through its previous all-time high from May 2021, moving into uncharted price territory and overcoming years of resistance in just days.

Technical indicators are overwhelmingly positive. Monero’s 50-day EMA is well above its 200-day EMA, confirming a strong bullish trend. The ADX for Monero is 28.5, comfortably above the 25 threshold that signals a trending market, indicating a genuine breakout with momentum.

However, the RSI for Monero is at 85.4, deep in overbought territory. While this doesn’t guarantee an immediate reversal, it suggests that the easy gains have likely already occurred, and latecomers may be entering at an extended level.

The Squeeze Momentum Indicator shows strong upward momentum at 1.76, far surpassing Dash’s 0.07, indicating that Monero’s rally is supported by underlying strength rather than just short covering.

Veteran trader Peter Brandt has compared Monero’s chart to silver’s long-term consolidation before its historic breakout, hinting that XMR could be on the verge of a similar explosive move.

The $600 level, previously a resistance point, now acts as support. As long as XMR remains above this threshold, the bullish outlook is intact. Next targets include $700 and, if momentum continues, the $800–$880 range.

Key Levels for Monero

• Resistance:
  • $700 (psychological)
  • $800–$880 (extended target)
• Support:
  • $600 (psychological/former resistance)
  • $554 (liquidation cluster)