XMR breaks through $644, ZEC crisis drives a major rotation of funds in the privacy coin sector

According to the latest news, XMR (Monero) increased by 10.44% within 24 hours on January 13, 2026, and is now trading at $644.39, hitting a new high. This surge is not an isolated event but the result of deep capital rotation happening within the privacy coin sector. As the collective departure of the Electric Coin Company, the core developer of Zcash, shook market confidence, funds did not exit the privacy coin sector entirely but quickly flowed into Monero, which has a more stable governance structure.

Price Performance and Market Data

XMR’s performance is clearly more than just short-term volatility. Over a longer timeframe, Monero has gained over 50% in the past month and 122% for the full year, outperforming Bitcoin during the same period. The recent price breakthrough of $644 is close to the $567 high set earlier this month.

Capital Rotation in the Privacy Coin Sector

ZEC Crisis Triggers Structural Reconfiguration

The most direct driver comes from the governance crisis within the Zcash ecosystem. The collective departure of Electric Coin Company (the core development team of ZEC) caused ZEC’s price to drop approximately 15-16%. However, crucially, this sell-off did not lead to a complete exit from the privacy coin sector but triggered a clear internal rotation.

On-chain data clearly reflects this. According to the Chaikin Capital Flow indicator, Monero’s capital inflow has rapidly increased, while ZEC shows a net outflow. During the period when ZEC fell about 16%, XMR actually rose about 5%, causing the market cap gap between the two to widen. This indicates that the market is reassessing the value proposition of privacy coins.

Why Funds Chose XMR

Compared to ZEC’s governance issues, XMR has the following advantages:

• Higher decentralization: Monero is driven by a global community of hundreds of volunteers, with no single core development team
• More mature privacy mechanisms: Uses ring signatures and stealth addresses, operating for nearly 10 years without major governance crises
• Recognized technical stability: Long-term absence of trust crises at the core development level

Technical and Fundamental Resonance

Strong Breakout in Technical Pattern

Since mid-January, Monero has achieved over 30% short-term gains, with technical patterns showing strong bullish signals. XMR has decisively broken through the long-term resistance at $515, with limited retracement and sustained buying interest, maintaining a bullish market structure.

Daily data shows that buying and selling forces are in a neutral to slightly bullish zone, with MACD and medium- to long-term moving averages trending upward since early 2026, reflecting ample trend momentum. This suggests a high probability of continued upward movement in the near term.

Reassessment of Privacy Demand Fundamentals

Deeper support comes from fundamental changes. As global regulatory scrutiny tightens, and cases of freezing stablecoins and traceable assets increase, some funds are re-evaluating the importance of privacy protection. Amid geopolitical tensions and highly transparent on-chain capital flows, Monero’s strong privacy features have attracted more attention.

It is worth noting that although XMR’s market cap share has risen to its highest level since 2023, it still remains in a relatively low zone. The characteristic of “price hitting new highs while market share remains low” often indicates that capital has not fully flowed in yet, leaving room for rotation from other altcoins into Monero.

Risks and Outlook

Short-term Risk Factors

The $480-$500 range is currently a zone of concentrated selling pressure. Trading activity in this area will directly influence the sustainability of subsequent breakthroughs. Additionally, weekend volatility and potential Bitcoin corrections could cause localized disturbances.

It is also important to note that privacy coins are mainly traded on offshore exchanges, and concentrated liquidity may lead to fragmented price discovery and amplified volatility. This introduces short-term risks of price manipulation.

Resilience Under Regulatory Pressure

It is noteworthy that Dubai’s new regulations, effective from January 12, 2026, ban anonymous cryptocurrencies including Monero. However, this policy has not prevented XMR’s rise; in fact, it somewhat reflects the market’s strong demand for privacy protection—funds continue actively allocating to privacy coins despite regulatory pressures.

A demand zone has already formed around $470, with a high probability that the price will find support in this area. Against the backdrop of rising interest in privacy assets and improved capital inflows, Monero is currently in a phase of trend and sentiment resonance.

Summary

XMR’s rapid rise reflects deep-seated changes in the privacy coin sector. The governance crisis of ZEC has led funds to rotate into the more stable XMR. The technical breakout and fundamental reassessment of privacy needs are resonating, propelling Monero into a new upward cycle. Despite regulatory pressures and liquidity risks, market demand for privacy protection remains resilient, supporting XMR’s continued performance. In the short term, attention should be paid to the $480-$500 zone, which will determine whether the upward trend can be sustained.