Privacy-themed crypto assets spiked to fresh peaks in Q4, with Zcash taking the spotlight. Traders hunted for clear narratives, shifting serious capital into privacy coins. While the rest of the field launched skyward, Monero barely budged during the same stretch. But sentiment flipped when Zcash hit leadership turbulence and capital rotated. Investors stepped back from ZEC and started funneling money into Monero.
Monero cooled off amid the capital shuffle after rallying to a new all-time high of $800. It then slid back to a local trough of $657. At the time of writing, XMR traded at $674, down 2.43% on daily charts. Before these losses, XMR had been on a tear, surging 47% on weekly charts. Over that same window, Monero’s market cap slipped from a peak of $14.5 billion to $12.4 billion. That’s a $2.1 billion drop, hinting at a massive capital exodus from Monero.
Monero logged a mild pullback after sellers barged in with force and funds exited in size. As a result, both long-term holders and short-term investors took profits. CoinGlass data shows Spot Netflow turned positive at $5.4 million on January 15, before reversing to -$362,000 the very next day. Such a sharp swing signaled intense downside pressure as more funds streamed out of the asset. Often, heavier inflows into exchanges have preceded lower prices as downward pressure intensifies.
The same market behavior popped up on the futures side as investors started trimming exposure. At press time, Futures Inflows fell from $1.7 billion to $285.9 million, while Outflows rose to $287.79 million. As a result, Futures Netflow dropped 106.59% to -$1.89 million from $41 million recorded three days earlier.
Interestingly, as the market retraced, whales dived into the Futures market and opened both short and long positions at a discount. According to Onchain Lens, a whale deposited $3 million into HyperLiquid and opened 5x short positions on 1,838.06 XMR worth $1.27 million. Another whale deposited $2.27 million into HyperLiquid and opened a long XMR position with 2x leverage. Usually, when whales take such positions, it suggests the use of leverage to maximize upside once the retrace ends.
Monero rallied as capital rotated out of Zcash and flowed into XMR and other more stable privacy-centered coins. However, the altcoin retraced as sellers stepped in with strength and cashed out, which weakened the bullish structure. At press time, the Relative Strength Index (RSR) fell from 87 to 79, indicating seller emergence into the market. Likewise, its Stochastic Momentum Index made a bearish crossover and dropped from 86 to 52, indicating strengthened downside pressure. These market conditions leave XMR in a risky position for further losses. Thus, if sellers continue to offload, Monero will go towards $518. Conversely, if the current upside momentum rebounds, XMR will reclaim $754 and eye another ATH.
