Monero Takes the Lead: A Look at its Recent Surge Amid Zcash's Challenges

Monero's XMR token has seen a notable increase of over 2.54% in the last 24 hours, pushing its impressive 7-day rally to more than 60.21%. Conversely, Zcash's ZEC token has faced significant declines following the mass resignation of developers at the Electric Coin Company on January 7th. This situation has raised governance concerns and led to a drop in confidence, causing ZEC to plummet by between 15% and 26% within a week.

Key Takeaways

Monero's XMR token is experiencing a strong uptrend, rising over 60.21% in the last week.
Zcash's ZEC token has dropped significantly due to internal governance issues and loss of confidence, falling 15%-26%.
Monero’s market cap has increased to approximately $13 billion, reclaiming its position as the top privacy coin.
Capital is shifting from Zcash to Monero, indicating investor preference for stability and liquidity.
The current phase from early to mid-January could be characterized as a "privacy season" for cryptocurrencies.

Monero reclaims privacy coin dominance as capital rotates out of Zcash

In contrast, Monero has surged, gaining over 40% during the same period. This rise has allowed Monero to reclaim its position as the leading privacy coin by market capitalization, now sitting at around $13 billion. This shift reflects a strategic movement of capital out of Zcash and into Monero, as investors prioritize stability, liquidity, and a more positive narrative.

Monero’s Market Performance and Future Prospects

At the time of writing, XMR is trading near $708. Monero successfully broke out of a long-standing support level around $420, accompanied by a notable increase in trade volume. Buyers have been active, and momentum traders have quickly joined in, enabling the price to move through resistance levels at $594 and $643 with relative ease.

The RSI has climbed above 85, indicating strong trend control, which aligns with the capital rotation happening within the privacy coin sector. This dynamic has made Monero the preferred choice for investors seeking reliability amidst Zcash's uncertainties, further cementing Monero's leadership position in the market. However, with the recent momentum, there is an increased risk of temporary pauses or small pullbacks.

On an hourly chart, prices peaked around $798 before settling back towards the $700 range. Profit-taking has been observed, with short-term traders securing their gains. Although the RSI has dipped toward neutral, this allows for a reset of momentum. Even with this pullback, Monero's structure remains solid, with previous resistance at $643 now serving as support. If this support holds, we could see continued upward movement; otherwise, a retracement to about $594 may occur.

A New Phase for Privacy Coins?

The rotation among privacy coins has intensified from January 7th to mid-January 2026, signifying what may be described as a "privacy season." During this timeframe, Monero jumped from approximately $420 to about $800, marking a gain of over 40% in just one week. Its market capitalization surged from around $9.2 billion to nearly $13 billion, suggesting net capital inflows of approximately $3.5-$4 billion.

This trend isn't isolated to Monero alone; other privacy coins like Dash (DASH) have also seen increases, with DASH climbing around 54% and adding an estimated $400-$500 million in market value. Nonetheless, the flows have significantly favored XMR, establishing it as the premier privacy coin in the market.

Zcash's decline has further catalyzed this trend, directing capital flows to Monero—recognized for being the most liquid and robust privacy asset. Overall, Monero's recent rise illustrates a strategic departure from Zcash and a clear structural shift within the privacy coin landscape. If key support levels remain intact, upward momentum might persist; however, a breakdown could indicate exhaustion and a halt in the broader sector rally.

Conclusion

As Monero continues to solidify its status amid shifts in investor sentiment, its future remains closely tied to the dynamics of the privacy coin market. Monitoring support levels and overall market health will be essential for understanding potential trends moving forward.