Why Monero Is Surging as Privacy Coins Regain Momentum

Monero (XMR) (XMR +6.7%) reached an all-time high of $738 this week, following a 4% price increase. This week’s performance reflects growing demand for anonymity in the sector and falls in line with the greater privacy coin trend. It also places the crypto classic back amongst market leaders such as Bitcoin (BTC +2.04%) and Ethereum (ETH +1.16%), evoking memories in long-time traders who remember when the market consisted of only a few major projects. Here’s what you need to know.

Privacy Coins Boom

Monero (XMR) is off to a record start this year, alongside several other privacy coins. This demand has been brought on by several factors, including increased scrutiny on other projects, CBDCs (Central Bank Digital Currencies), and regulatory pressure. New regulations, such as the CLARITY Act, will require in-depth tracking of crypto assets.

As such, privacy advocates continue to migrate to projects that provide another layer of protection. This demand can be seen by recent market movements, including the fact that the privacy coin sector has seen trading volume increase by +62% to surpass $7.4B recently.

Projects like XMR, DASH (DASH +31.99%), and ZEC (ZEC +10.66%) have been the top performers in the sector due to their proven track record and privacy-first model. However, XMR has taken the crown recently as investors have helped drive token demand to unprecedented levels.

Monero Surges

It is rare to see a privacy coin outperform Bitcoin. Interestingly, the last time Monero accomplished this task was in May 2021. At that time, the market looked very different. However, privacy concerns were still among the top factors driving XMR’s movements.

This time around, XMR has outperformed the market and its sector, securing gains of over 60% in the last week. This growth has catapulted this privacy coin into the 12th spot in terms of market cap at around $13B. Currently, it remains at the $14th spot.

XMR has secured a +7.21 gain in trading volume over the last 24 hours, pushing its total volume to an impressive $477M. Notably, XMR, as one of the oldest and most established privacy coins, has become the logical option for privacy coin investors.

Key Drivers Behind Monero’s Recent Rally

There are several factors that analysts point to as the main causes for this sudden influx of capital into XMR. For one, there is a strong investor sentiment to buy the dip. Crypto prices fell slightly, but unlike years prior, the market didn’t experience a year-long crypto winter as institutional inflows due to ETFs and other factors have helped to limit volatility, boosting investor confidence in long-term gains.

ZEC Outflow

Another factor that analysts point towards is the Zcash outflow. ZEC prices dipped 26%, erasing $1.6B in market cap following news that several core developers from the Electric Coin Company (ECC) were resigning. Notably, the resignations were spurred on due to disagreements originating from governance issues.

Given Monero’s track record and longevity, it was the obvious replacement for investors seeking continued exposure to the market. Keenly, there are many analysts who believe this outflow will continue for the coming days or weeks.

Funding Increase

Another interesting metric driving XMR price increases is added liquidity. More investors are utilizing leverage to gain stronger positioning in the XMR market. These investors want to maximize their gains, which can be seen with Monero exceedingly gaining value across the greed metric.

Reports show that open interest in the sector is up 3X since December. This data suggests that investors remain bullish on growth as they attempt to lock in as many tokens as possible. Their goal is to ride what many perceive as the start of a major privacy coin push.

Liquidated Short Positions

Another major driver behind the recent price surge is an increase in liquidated shorts. When a short gets liquidated on an exchange, the platform must then purchase the token at the current spot value.

Interestingly, +$500M in XMR shorts recently closed alongside a similar amount of investors going long on the token. These market conditions signal that there’s room for further price increases in the short term.

FOMO

Of course, no crypto price surge would be complete without social media doing its part. Monero has seen significant hype recently across these channels, leading to a rising FOMO amongst investors eager for the next big gains.

Notably, this behavior is common with digital currencies. However, it can lead to additional volatility as short-term traders are quick to dump their holdings.

What to Expect from Monero Moving Forward

When you look at the XMR market, there are two most likely outcomes. The first is that the privacy coin uptrends will continue, and XMR will enjoy further gains. This assessment comes from positive market sentiment and on-chain metrics suggesting that investors are heavily committed to this privacy coin push.

Additionally, the FOMO could help to entice investors to continue to pour funding into XMR. This continued support will signal to other investors that it’s time to participate, and the cycle could continue as long as the bullish momentum can support it.

XMR Uptrend

This camp has set its sights on new all-time highs, surpassing $1000 by the end of Q1 2026. Some analysts have predicted $1400 as the coin’s top end. Their analysis has taken into account the increasing number of long-term investors entering the XMR market. These token holders are likely to help stabilize against short-term sales.

Retracement

On the other end of the spectrum, you have analysts who predict a sharp retracement is in order. These financial experts believe you could see the coin pullback to around $600 as FOMO cools down. Notably, $600 is seen as a psychologically relevant support number that, if crossed, could see the token value drop to as low as $489.50.

Technical Indicators

When you zoom out and do technical analysis, there are definitely some interesting metrics worth discussing. For one, the majority of indicators seem to suggest that the asset has entered the overbought region. These concerns have become increasingly louder as XMR futures and leverage create more market pressure.

RSI

Specifically, the Relative Strength Index (RSI) shows nearly 80, which is a definitive sign that buyers are now in the FOMO stage. This heightened bullish momentum is far above the 70 RSI metric that marks the start of overbuying, meaning that a short-term pullback is imminent. Additionally, the token has bullish MACD lines, another sign that buyers are entering into speculative territory.

Sharp Volatility

No matter what side of the camp you sit on, it’s certain that Monero will experience some sharp volatility in the coming days. In which direction is anyone’s guess. However, the probability leans toward a correction as there has been minimal development activity to warrant such price gains. Additionally, all historical data points to privacy coin volatility following sharp gains.

Monero vs Zcash: Diverging Privacy Narratives

There are some who believe that all privacy coins experienced gains for the same reason. However, after deeper investigation it’s easy to see that this isn’t the case. Zcash, which is often cited as an example, experienced gains due to privacy coin hype and crashed due to internal conflicts.

Monero, on the other hand, primarily experienced demand due to regulatory changes and demand for more privacy amongst traders before gaining additional momentum due to the overall privacy coin push. Interestingly, this scenario may not be a good thing because, comparatively, Zcash had better metrics, only showing 31 RSI versus XMR’s current 78 RSI.

Privacy Coins Market Movements

Zooming out to the privacy coin market, you can see that Zcash has already begun to start recovering its losses. The coin is up +4.39% in the last 24 hours, regaining some of the 16% it lost over the last week.

Dash has had an entirely different experience. This one-time privacy token has experienced a 40% price gain. Notably, DASH completely revamped its image after its privacy features were cracked. Despite this rebranding, it is still considered a privacy coin by long-time crypto investors.

Broader Crypto Market Reaction

If you continue looking at the big picture, you can see that the entire market has seen some recovery as investors are now buying the dip. This momentum helped Bitcoin bounce back over $94k and ETH to surpass $3300. In total, the current crypto market now has a market cap of +$3.3T with BTC retaining 51% dominance.

Monero History

Monero has a long and exciting history in the market. The token launched way back in 2014, amongst a completely different market. At that time, cryptocurrencies were seen as a fringe experiment by many. Consequently, there was no immediate response to the introduction of anonymous digital currencies like XMR.

Monero launched as a direct fork of Bytecoin, which was the first crypto to integrate the CryptoNote protocol. The project originated in 2012 and was founded by anonymous developers. Interestingly, Monero was launched by a team of blockchain developers.

Riccardo “fluffypony” Spagni and David Latapie are the only two developers out of the seven who didn’t stay anonymous. The other developers choose to stick to the theme using names like smooth, other, NoodleDoodle, Taco Time, and wish to remain private.

Upgrades Keep XMR Effective

Monero has undergone several major upgrades over its time as a leading privacy coin. One of the most important enhancements was the integration of RingCT in 2016. This improvement provided a confidential transaction feature.

In 2018, Monero introduced another game-changing feature, dynamic block sizes. This helped to scale the platform to meet growing demand. It also made a major transition to the upgraded RandomX algorithm. This decision improved decentralization and scalability without sacrificing privacy, leading to further upgrades in 2022 that reduced transaction sizes.

Details of 2025 51% Attack

Monero experienced an attempted 51% attack in August 2025. A 51% attack seeks to control more than half of a network’s hashrate. If successful, it enables the attacker to rewrite the blockchain and double-spend, leading to major losses.

In this incident, Monero was targeted by the Qubic mining pool. The pool attacked the network by redirecting its PoW hashrate in a way that overloaded the network’s RandomX algorithm. This scenario caused the pool to gain briefly +60% of the network hash rate.

The hackers then reorganized the blockchain several times before they were booted from the network. Notably, the hack only lasted a few hours. Luckily, the reorganization didn’t result in major losses as it was discovered before any damage was inflicted. The unusual nature of this hack and the lack of major financial losses have led many to label the attack as a failure.

Latest Monero (XMR) News and Performance

Privacy Coins like XMR Finally Get to Shine

When you examine the integration of cryptocurrencies into traditional financial markets, it’s easy to see that many of the characteristics that crypto users desire are in contrast with traditional financial strategies.

As such, there will always be demand for privacy coins. From making private purchases, political donations, or protecting your assets, privacy coins will become the new standard as blockchain policing goes into full swing.

Learn about other cool digital asset developments here.