The rotation in the privacy coin sector intensifies, with Dash taking over Monero to kick off a surge?

Privacy coins have recently experienced a strong rotational market trend. Following Monero’s all-time high, another well-known privacy token, Dash, surged approximately 85% in the week ending January 14, touching around $59, and confirmed a bullish “descending wedge” breakout, with a technical target pointing to $93.50.

This rotation is driven by multiple factors: internal governance issues causing capital outflows from competitors like Zcash, and a broader strategic reassessment of privacy assets amid tightening global regulations. However, Monero shows signs of overheating in the short term. Whether Dash can continue to lead the market remains to be seen, depending on the strength of capital inflows and the effectiveness of technical breakthroughs.

Dash Breaks Out Strongly: Technical Pattern Suggests 56% Upside

By mid-January 2026, the privacy coin sector in the cryptocurrency market has surged, with Dash performing particularly well. As of January 14, Dash’s price soared to about $59, with an weekly increase of roughly 85%, becoming a market focus. This rally is not isolated; it reflects the overall strong upward momentum of the privacy coin sector, which has recently been led by Monero setting new all-time highs, injecting strong energy into the entire segment.

From a technical analysis perspective, Dash’s recent rise is well-supported by chart patterns. On the daily chart, the DASH/USDT trading pair has clearly confirmed a bullish breakout of a key “descending wedge.” This pattern consists of two converging downward trendlines, typically appearing at the end of a downtrend, indicating diminishing selling pressure. When the price breaks above the upper boundary with increased volume, it often signals a trend reversal and the start of a strong upward move. According to classical technical analysis, the minimum measurement target after a breakout is roughly equal to the height of the wedge at its widest point.

Applying this theory to Dash’s current movement, the initial significant upside target after the breakout is around $93.50. This implies a potential increase of about 56% from the current level of approximately $59, with the time window possibly extending until March this year. This clear technical target provides the market with a defined reference point, attracting trend traders and technical analysts. Of course, trading always involves risks; currently, Dash’s daily Relative Strength Index (RSI) has entered overbought territory (above 70), increasing the likelihood of a short-term correction to support levels around $47 to $50, which also roughly coincide with the 0.786 Fibonacci retracement level.

Dash Key Technical and Price Level Analysis

Current Price and Breakout Level: About $59, confirmed breakout above the wedge’s upper boundary.

Upside Target: Approximately $93.50 (technical measurement).

Potential Upside: About 56%.

Recent Support Zone: $47 - $50 (coinciding with the 0.786 Fibonacci retracement and breakout confirmation zone).

Key Time Window: Uptrend may continue until March 2026.

Sector Rotation Revealed: Why Is Capital Flow Moving from Zcash to Dash and Monero?

Dash’s explosive rally must be viewed in the context of intense capital rotation within the entire privacy coin sector. Monero led the charge and hit new highs first, but part of the driving force stems from difficulties faced by its direct competitor, Zcash. Recently, Zcash has been under pressure due to governance disputes and the departure of core developers, causing some investors with long-term concerns to reallocate their assets.

In this environment, capital naturally flows into other fundamentally solid options within the sector. Monero, with its longest-standing and most thorough privacy features, along with a relatively stable development team, has become the main recipient of funds, pushing its price to historic highs. Dash, in turn, has become a potential “second beneficiary” of this rotation. Unlike the troubled Zcash, Dash has long operated a unique decentralized autonomous organization (DAO) governance model, using masternode networks for on-chain voting. This mechanism has recently been stable and free of major governance crises, providing a “relative stability” that is particularly attractive in the current environment.

Historical market behavior suggests that Dash often does not lead the initial surge in privacy coin rallies; its performance can be somewhat lagging. However, once leaders like Monero expand the sector’s overall price space and market attention, capital begins to explore other undervalued assets within the sector for diversification. At this point, privacy coins with certain market capitalization, technological features, and community support—like Dash—are more likely to attract investment. Current market dynamics seem to confirm this pattern: after chasing Monero’s early explosive gains, investors are starting to take profits or allocate new funds into Dash to seek diversification and potential catch-up opportunities within the sector. This healthy internal rotation often signals a deepening and sustained trend.

Monero’s Dominance Remains Firm, but Overheating Risks Must Not Be Ignored

Undoubtedly, Monero remains the engine and benchmark of this privacy coin rally. Since the beginning of the year, its price has increased over 60%, and this week it approached a record high near $680. Technically, this is characterized by a strong breakout of the key support zone around $420–$450, with persistent buying pushing the price into uncharted territory with no historical resistance, accompanied by significantly increased volume, indicating strong momentum.

The core logic behind Monero’s surge is rooted in the broader macro trend of the global financial environment. As Vikrant Sharma, CEO of Cake Wallet, pointed out, Monero offers “default, non-optional financial privacy” in a world rapidly moving toward comprehensive surveillance. With governments expanding anti-money laundering, KYC, and on-chain monitoring regulations, the value of cryptographic privacy technologies (such as ring signatures and stealth addresses) is being re-recognized and validated by the market. While this may create additional hurdles for Monero’s listing on mainstream centralized exchanges, it also generates a reverse demand: some users see privacy assets that cannot be monitored as scarce and strategically important financial assets.

However, behind the large gains and market buzz, some overheating signals are flashing. Data from on-chain analytics platform Santiment shows a sharp rise in Monero’s “social dominance,” indicating an unusually high proportion of discussions about XMR on social media—often a sign of market euphoria and FOMO. Meanwhile, development activity metrics are below recent averages, suggesting that the price excitement may be outpacing actual technical progress. More concerning is the leverage in derivatives markets; CryptoQuant’s futures volume bubble charts have repeatedly issued overheating warnings after price surges. Historically, similar leverage-driven patterns in Monero’s market cycles do not necessarily end long-term trends immediately but often lead to sharp volatility and deep corrections. Therefore, despite Monero’s strong long-term narrative, its short-term risk-reward profile is shifting, and investors should prepare for potentially high volatility ahead.

The Rise of Privacy Coins: Short-Lived Fad or Long-Term Revaluation?

The collective excitement around privacy coins like Monero and Dash prompts us to consider: is this merely a short-term market hype, or the beginning of a long-term revaluation based on solid fundamentals? Answering this requires a comprehensive assessment across technical needs, market structure, and regulatory environment.

From a technical demand perspective, blockchain transparency is a double-edged sword. While it fosters trust, it also exposes users’ financial privacy. As the user base of cryptocurrencies expands from early tech enthusiasts to broader mainstream audiences—including enterprises, high-net-worth individuals, and ordinary users with higher demands for financial freedom—the rigid need for transaction privacy will grow exponentially. Monero’s default privacy and Dash’s optional privacy features (via PrivateSend) address this critical market segment in different ways. This demand will not disappear under regulatory scrutiny; instead, it will become more covert and intense.

From a market structure standpoint, privacy coins have historically occupied a relatively small market cap share compared to their enormous potential demand. When Bitcoin and Ethereum enter consolidation phases or mid-bull markets, capital often seeks new narrative-driven “value pockets.” Privacy coins with strong independent narratives, high technical barriers, and loyal communities are prime candidates for such spillover investments. The current rally can be seen as a market correction of the sector’s long-standing undervaluation.

The most unavoidable topic remains regulation. Global authorities are scrutinizing privacy-enhanced cryptocurrencies with the strictest standards. This limits mainstream trading channels and raises barriers for retail investors but also enhances their “scarcity” and “censorship resistance” as assets. Future development may bifurcate: fully compliant privacy solutions (e.g., zero-knowledge proofs in certain regulatory contexts) could become mainstream, while protocols like Monero, which prioritize absolute privacy, may evolve into “hard currencies” or stores of value within the digital realm, maintaining vitality within specific circles. Dash’s “optional privacy” feature might find a delicate balance between privacy needs and regulatory acceptance.

For investors, participating in the current privacy coin frenzy requires a clear mind. On one hand, be aware of the risks of sector rotation and leverage-driven volatility, avoiding chasing highs in euphoric markets. On the other hand, conduct in-depth research into different privacy protocols’ technical features, governance models, and roadmaps for long-term allocation. After all, financial privacy remains an eternal and vital theme in the digital asset world.