Funds from investors interested in privacy coins are showing signs of heading toward altcoins with lower market caps. This change comes as many believe multi-billion dollar projects such as XMR and DASH have reached saturation. DUSK is attracting attention as a candidate.
What advantages does DUSK have for investors? What do the on-chain data signals alert us to? We will discuss these questions in detail in the next article.
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Dusk (DUSK) defies the market, rising more than 4x in January
On January 19th, while Bitcoin fell nearly 3% to below $93,000 and many altcoins fell 5-10%, DUSK soared 40% to a high of over $0.22. This is the highest level since January 2025.
DUSK has more than quadrupled since the beginning of the year. According to Arcam data on DUSK trading volume across centralized exchanges (CEX), trading volume exceeded $1.4 billion in the past week. This is the highest level in the past year.
According to CoinGecko, at the time of writing, the altcoin ranks in the top four in terms of 24-hour trading volume, behind ZEC, XMR, and DASH. The sudden spike in transaction volumes suggests that DUSK is attracting strong interest from retailers.
Two important factors causing DUSK price hike
The first factor lies in the intrinsic value of DUSK. Its key strength comes from advanced encryption technology. DUSK integrates zero-knowledge proofs (ZK proofs) and zk-SNARKs to hide transaction details while giving regulators access to the data they need.
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While altcoins such as XMR can face legal issues even with regulators due to their complete anonymity, DUSK takes a different approach. This path does not necessarily satisfy privacy maximalists, but it does aim to strike a balance.
Investor Paxton explained that companies need privacy, but regulators need transparency. Sunset is located in the middle.
“Private by default, but accountable when needed. DUSK’s shielded transfers hide the sender and amount from the public, but the recipient can still verify and cryptographically prove who paid. This missing piece makes privacy on Dusk more travel rule-friendly and compliant.” — Hein Dauven, CTO, Dusk Foundation.
The second factor is more external. Investors increasingly believe large-cap privacy coins have limited upside after a strong rally. As a result, capital flows to small privacy projects. DUSK’s current market capitalization is just over $100 million.
On-chain data indicates potential risks
Despite the strong rally, the price could face risks if it soars fourfold. On-chain exchange flow data from Arkham provides a warning signal.
This data reflects the amount of DUSK entering and exiting exchanges. Between January 16 and 17, foreign exchange inflows soared to more than 6 million DUSK per day. This is the highest level in the past 30 days. This data suggests that early investors may be taking profits after the recent rally.
Additionally, the rotation of capital into altcoins with lower market caps within the same story often signals that the cycle is nearing its end. Coupled with the resurgence of fear sentiment in the third week of January, this trend could increase risk for investors chasing DUSK at current levels.
