Zcash’s price is under acute pressure following turmoil within its core development team. The privacy-focused virtual currency suffered a sharp decline as confidence declined.
At the same time, market trends suggest a possible rotation of funds from Zcash to Monero, raising questions about whether XMR can benefit from ZEC’s increasing uncertainty.
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Zcash developer quits
Electric Coin Company CEO Josh Swihart confirmed that the entire ECC team has resigned after what he called a “constructive dissolution.” This term refers to situations where working conditions have changed so significantly that the employee has no real option but to resign.
Swihart said decisions made by the board that oversees ECC changed the terms of employment in a way that compromised the team’s ability to operate independently.
“Yesterday, the entire ECC team resigned after being constructively terminated* by ZCAM…We are forming a new company, but the same team with the same mission of building unstoppable private capital. Importantly, the Zcash protocol remains unaffected. This decision is solely aimed at protecting the work of our team from malicious governance practices that have made it impossible to honor ECC’s original mission,” Swihart said.
Zcash holders retreat
ZEC holders were quick to react to this announcement. On-chain data shows a spike in sales activity within hours. Nansen reported that forex inflows have surged, with ZEC balances on the exchange increasing by about 7% in 24 hours.
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A rising exchange balance usually indicates readiness to sell. This action highlights the sudden change in Zcash investor sentiment. Confidence eroded rapidly as participants reassessed the risks associated with continuity of leadership and development.
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Such a rapid selloff suggests skepticism rather than patience. When governance shocks occur, short- and intermediate-term holders are often the first to reduce their exposure. This reaction adds downward pressure on an already unstable situation.
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XMR gains from ZEC losses
Capital flow data suggests a possible rotation from ZEC to Monero. Although not conclusive, the indicators show different trends between the two privacy coins. ZCash’s Chaikin Money Flow turned negative, suggesting net outflows.
Over the same period, Monero’s CMF soared, reflecting increased inflows. These opposing signals occur simultaneously with price movements. Zcash price fell 16.7% to trade around $398, while XMR price rose about 5% in the same time frame.
The timing suggests investors may be reallocating within the privacy space rather than exiting it entirely. When uncertainty arises in a single project, capital often moves toward perceived stability within the same narrative category.
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XMR could reach ATH
Momentum indicators further support the improving outlook for Monero. The XMR money flow index spiked early in the morning following the Zcash announcement. MFIs track buying and selling pressure using both price and volume.
The rise in MFIs indicates strong demand entering the market. In the case of Monero, this rise suggests buyers are entering with confidence. This demand likely reflects investors wanting to take advantage of privacy coins without disrupting governance.
XMR is currently trading around $456, about 13.5% below its all-time high of $518.99. Sustained purchasing pressure could act as a catalyst. If capital transfers from ZEC continue, Monero may gain the momentum it needs to challenge its previous highs.
