XMR Holds Strong as ZEC Plummets: Correlation Crumbles

Key Takeaways

• Historically, the values of privacy-focused cryptocurrencies have tended to move in tandem.
• However, the situation shifted when ZCash experienced a rally.
• With Zcash losing ground, Monero is moving forward to regain prominence.

Being the biggest and most recognized privacy-focused cryptocurrencies,Monero (XMR) and ZCash (ZEC)Historically, they’ve tended to move together, influenced by similar stories and economic trends.

However, while ZEC has experienced a sharp and severe decline in price.In the past few days, XMR stands out as one of the few cryptocurrencies that actually saw market increases amidst an otherwise down market.bearish November.

Monero Defies the Downturn.

During November, theThe overall value of the cryptocurrency market decreased. by more than 21%, reaching around $2.9 trillion on Dec. 1.

During the same period, XMR climbed over 16% including a 5% rally in the past week, running in the opposite direction to the rest of the market.

Some analysts have speculated that Monero’s recent gains reflect a privacy coin rotation as ZCash investors take profits following a meteoric rally that lasted from the end of September through to mid-November.

Privacy Hawks Reclaim the Narrative

After ZEC flipped it on Oct. 31, XMR has now reclaimed its position as the largest privacy coin, a title it held confidently before the recent ZCash surge.

The OG privacy coin is generally preferred among users who value true anonymity.

Compared to Monero’s ironclad encryption guarantees, ZCash users must opt in to hide their addresses, and transactions can be deanonymized much more easily.

With its semi-transparent design, recent interest in ZCash reflects a demand for private crypto payments that still comply with transaction monitoring requirements.

But now that ZEC’s rally has fizzled out and the token has plummeted around 50% from its recent peak, XMR may prove to have the more enduring narrative.

Statistical analyses have shown that privacy coins typically display a tighter, more stable correlation than other cryptocurrencies, with XMR and ZEC displaying a positive Pearson coefficient of around 0.57 .

However, this pattern broke down when ZCash started to diverge from the broader market in September, outperforming Monero significantly, even though they were moving in the same general direction.

Now, with Monero swimming against the current as ZCash and Dash retreat from recent highs, the privacy coin market is decoupling further.