Monero surges, Zcash plummets: what explains the opposite movement of privacy coins

Source: PortaldoBitcoin Original Title: Monero surges, Zcash plummets: what explains the opposite movement of privacy cryptocurrencies Original Link: The privacy-focused cryptocurrency Monero (XMR) increased by more than 23% in the last week amid a calm crypto market environment, while Zcash (ZEC) lost about 25% in the same period.

Both privacy-focused cryptocurrencies have exhibited volatility, with Monero currently trading at $407, while Zcash is priced around $474, according to data from CoinGecko.

What is driving this dynamic?

The narrative of privacy-focused coins continues to be a dominant factor shaping the performance of Zcash, Monero, Dash, and other related tokens. For the most part, these altcoins have remained immune to macroeconomic uncertainty.

The current dynamic, in which Zcash fell two digits in the week while Monero rose in the same proportion, can be attributed to the rotation of capital within the privacy sector.

“Privacy has gained popularity, and both Monero and Zcash have benefited from it,” said Quinten van Welzen, head of strategy and communications at Zano. “Short-term movements, such as Monero's rise while Zcash is falling, mainly reflect positioning, leverage, and timing, rather than a reversal in the underlying demand for privacy.”

However, not all privacy-focused cryptocurrencies are built the same way.

This category of cryptocurrencies recorded a decline of 3.8% in the last 24 hours and almost 40% in the last week. In terms of market capitalization, Monero is the only highlight of the sector, with an increase of 4.1% on the day, while Zcash and Dash fell by 4.4% and 7.3%, respectively.

A more detailed analysis of the perpetual data shows that the recent movement of Monero is primarily driven by the futures markets. The aggregated spot buy and sell delta at 10% depth shows sustained selling pressure, while the perpetual buy and sell delta at the same depth remained positive.

This can be corroborated by analyzing the deltas of cumulative spot and perpetual volume, which are the differences between total buy and sell volumes. While the spot CVD remained stable, the futures CVD showed an upward trend, according to data from CoinGlass.

Together with the increase in open interest, which represents the total number of open positions, this confirms that the movement was driven by speculation from futures traders and not by spot purchases.

Usually, a rally led by perpetual orders is often considered weak, especially if there is no continuation from spot buyers. Therefore, Monero's recent upward trend may unwind if investors liquidate their positions. This will allow profits to be reallocated to Zcash, Dash, or other popular privacy-focused cryptocurrencies.