ZCash-Monero Correlation Breaks Down—XMR Resilient While ZEC Crashes

Key Takeaways

• Privacy coin prices have traditionally been closely correlated.
• However, that changed with ZCash’s fall rally.
• Now, as ZEC retreats, Monero is stepping up to reclaim the spotlight.

As the largest and most well-known privacy coins, Monero (XMR) and ZCash (ZEC) have traditionally moved in tandem, responding to the same narratives and macroeconomic forces.

However, while ZEC has suffered a brutal selloff in recent days, XMR is one of just a handful of cryptos that clocked market gains in an otherwise bearish November.

Monero Bucks the Bearish Trend

In the month of November, the global crypto market capitalization declined 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.