Even after reclaiming multiple technical zones, the trade-off is now clear: upside momentum improved, but execution risk increased. When a token runs this far this fast, the market typically shifts from “buy the breakout” to “manage the pullback risk,” especially for desks that care about slippage and unwind mechanics.
Overbought conditions and the levels that matter
By Jan. 14, technical readings referenced in market coverage placed RSI above 70 and the Money Flow Index at multi-month highs, a combination that typically flags overbought conditions and a higher probability of consolidation. The price map being discussed around the move focuses on a tight set of levels: resistance in the $62–$65 range, a stretched upside marker near $79, and a key support reference at the 200-day EMA around $58.71.
Those levels matter less as “predictions” and more as coordination points, where liquidity tends to cluster and where forced positioning changes can accelerate moves in either direction.
What drove the surge: leverage pressure and sector rotation
This wasn’t framed as a slow, fundamentals-led grind. Instead, coverage emphasized short-squeeze mechanics, pointing to negative funding rates in perpetual futures that can punish short sellers when price rises, forcing buybacks that amplify the move. In thin liquidity windows, that feedback loop can turn a strong rally into a runaway rally.
At the same time, the broader privacy-coin complex showed a rotation effect rather than a uniform lift. Dash outperformed Monero in the same window (with a cited 24-hour gain around 21% versus Monero near 15%), while Zcash was lagging around the low $400s. That kind of “leadership shuffle” is a sign of speculative positioning migrating inside a niche, which can reverse quickly once the next narrative or squeeze target emerges.
Beyond price action, privacy assets still carry a persistent compliance and listing risk premium. Recent examples cited in coverage included delistings by Bit2Me (March 2025) and EXMO (July 2025), reinforcing the point that venue access can change abruptly for this category. Europe’s regulatory trajectory is a key determinant of longer-run liquidity, including discussion of a potential EU-level restriction by 2027 as a material tail risk for the segment.
For institutional-style participants, this is why rallies in the space can be powerful but fragile: liquidity can expand fast during a squeeze, then contract just as fast if venue policy or regulatory expectations tighten.
In practical terms, desks are monitoring two decision points. Holding above the $62–$65 band would support the case that the move is transitioning from squeeze-driven to trend-supported, while a drop back below the 200-day EMA (~$58.71) would undermine the technical base and raise the odds of a sharper retracement. Alongside spot price, funding rates and liquidity depth are the real-time indicators that will signal whether the rally is stabilizing or reverting.