Privacy Coins Face Selling Pressure Following Sharp Rallies

Source: CryptoDaily Original Title: Privacy Coins Face Selling Pressure Following Sharp Rallies Original Link: The privacy-token sector came under pressure as traders locked in profits following steep rallies earlier this month, triggering technical breakdowns across major names such as Monero (XMR) and Zcash (ZEC). Both assets slipped lower in Thursday trading, with ZEC seeing the sharpest declines.

Zcash Breaks Key Supports as Momentum Turns Lower

Zcash (ZEC) fell almost 9% in a single session after breaking below several closely watched technical levels, including $421.90 and the 20-day exponential moving average (EMA) at $488.60. The move confirmed a shift in short-term momentum and opened the door to deeper retracement.

A bear flag pattern is developing—a continuation formation that could send the token toward the $275–$300 zone if support at $390 fails. With ZEC’s RSI-7 sitting at 42.78, the market shows no signs of oversold relief, suggesting sellers may continue to dominate.

Technical failures of this kind often activate algorithmic strategies and trigger stop-loss cascades, contributing to sharper downside moves in lower-liquidity segments such as privacy coins.

Monero Retreats After Reaching All-Time High

Monero (XMR) also slipped, losing roughly 2% after a record run that saw the token surge to $797.54 on January 14, marking a 65% gain over the past month. The rapid ascent drew in momentum traders, many of whom moved to lock in profits as the token entered overbought territory.

XMR’s RSI-7 climbed to 80.11, a level that typically signals exhaustion. The subsequent pullback followed a familiar pattern: steep extensions often give way to corrective phases as shorter-term participants unwind positions.

The 23.6% Fibonacci retracement at $706.57 now represents immediate resistance, with the 38.2% level at $649.44 serving as a deeper downside target. Analysts note that sustained closes below $700 could invite further selling pressure.

Market Context: A Sector Reset After Crowded Rallies

Privacy coins have historically exhibited wider trading ranges than the broader market, with thinner liquidity amplifying both rallies and declines. The current pullback reflects that structure: strong appreciation created crowded positioning, and relatively minor technical breaks evolved into broader selling.

With key support levels compromised in ZEC and momentum cooling in XMR, traders may look for stabilization around lower Fibonacci and multi-week support zones before reassessing trend direction.

Outlook

For now, privacy coins appear to be entering a cooling period after outsized gains. Stabilization may depend on whether buyers step in at intermediate support levels and whether broader market sentiment firms.

As momentum continues to shape both trading and narrative cycles, projects operating in volatile sectors may need to align messaging with the realities of fast-moving markets.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.