Privacy cryptocurrencies rose by 4.5% on Monday. The best performers were Zcash and Monero, but even after this rebound, the sector is still down about 12% for the month. There is growth, but on-chain data and the behavior of large players do not yet give a clear answer as to whether the movement can continue.
During the last drop, privacy coin networks held up better than their prices. Users continued to make transactions, and activity did not collapse along with quotes. But among major market participants, sentiment is no longer as confident. Smart money is holding short positions, and the overall mood around the sector has noticeably worsened. Therefore, the current rebound does not look as solid as the green candles on the chart might suggest.
The rebound of privacy coins is not related to network problems, but to market sentiment
Over the past month, privacy coins have fallen sharply after news of a vulnerability in the Zcash shielded pool. This story hit trust in the entire sector, although the networks themselves continued to operate without serious failures. That is, the market got scared faster than the real activity indicators worsened.
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In the past day, Zcash (ZEC) gained about 7%, Monero (XMR) rose by about 7.6%, and Dash (DASH) increased by 1.6%. But looking at the month, all three coins are still deep in the red. This shows that the recent growth so far looks more like a rebound attempt after a heavy sell-off, not a confident reversal.
The deterioration in sentiment is especially clear for Zcash . After the vulnerability news, the positive sentiment indicator for the project plummeted. On June 5, it was at 163.9 points, and a few days later it fell almost to zero, to about 0.73.
Zcash price and positive sentiment dynamics. Source: Santiment.
Sentiment may be supported by the Ironwood update, which developers tentatively plan to launch in July 2026. Monero showed a similar picture: the positive sentiment indicator around the project dropped from about 35 to 1.72 points. Additional pressure appeared after the coin was added to the audit queue.
Monero price and positive sentiment dynamics. Source: Santiment.
According to the data, the sell-off was mainly triggered by a loss of trust, not a mass exodus of users from the networks. Activity in privacy coin blockchains did not collapse along with prices, and this is an important point for further sector assessment. If users continue to use the network even during a downturn, it means the fundamental picture may be stronger than it appears on the charts.
Activity in Privacy Coin Networks Fell Much Less Than Their Prices
On-chain data gives more grounds for the current rebound. Quotes fell sharply, but activity in the largest privacy coin networks declined much more mildly. This does not negate market weakness, but shows that interest in using such networks has not completely disappeared.
A good example is Dash. At the end of May, the number of active addresses in the network reached about 66,000, after which it dropped to 34,000. The number of transactions over the same period fell from about 18,400 to 13,000. There is a decline, but it looks much milder than the price drop.
Active DASH addresses. Source: Blockchair.
For Dash the decline in activity coincided with worsening sentiment. The positive sentiment indicator for the project fell from 6.67 to 1.74 points. That is, interest in the coin really cooled, but the network did not stop. There were fewer users, but the drop in activity was not as sharp as the price movement.
DASH price and positive sentiment dynamics. Source: Santiment.
At the same time, Dash statistics show even stronger signals. Although the number of active addresses decreased, the volume of capital passing through the network began to grow again. Over the past 30 days the exchange volume has gradually increased. The total indicator approached $2.96 billion, and on one of the recent days, the daily volume reached about $210 million.
This suggests that individual user activity has decreased, but capital movement remains significant. For the market, this is an important difference. If a network loses addresses but still sees large volumes passing through, it means interest from larger participants may have remained even amid weak sentiment.
Dash exchange and network activity. Source: Charlie Quant Lab.
Monero also supports this picture. Network activity not only did not collapse, but on some days continued to grow. On June 7, the Monero network recorded about 23,900 transactions per day, and later the figure rose to almost 28,600.
The Monero hashrate, after a slight dip, held around 5.9 GH/s. This is usually considered a sign that miners continue to support the network and are not in a hurry to leave even during market weakness. Therefore, the data for Monero looks more resilient than one might expect if only looking at the price.
Monero network status. Source: Charlie Quant Lab.
The most noticeable gap between price and activity is now shown by Decred. Over the past 90 days, the coin’s price has dropped by about 54%, while the number of transactions over the same period fell by only about 12%. That is, the market punished the token much more severely than the actual network usage declined.
For analysts, this is an important signal. When the price falls much faster than network activity, the reason is often not a deterioration in the project’s performance, but market sentiment. In the case of Decred users continue to use the network, even despite strong price pressure.
Decred network and coin price. Source: Charlie Quant Lab.
Strong on-chain indicators are only part of the picture. Looking at the actions of the largest holders and professional traders, the signal is not so clear. Privacy coin networks are holding up well, but large players are not yet behaving as if they are fully confident in continued growth.
Large Players and Professional Traders View the Situation Differently
Network data explains why whales are not in a hurry to fully exit privacy coins. But position data shows that the market also lacks full confidence in growth. Large wallet holders retain interest, but smart money is much more cautious.
This is especially evident in the positions of traders considered smart money. These are wallets with a strong trading history, often followed by market participants. Currently, this group holds a net short on the two main coins in the sector. For Zcash the volume of short positions is about $9.6 million, for Monero — about $1 million.
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Such positioning looks more like a bet against sentiment than against the networks themselves. Professional traders, apparently, believe that the recent rebound may quickly run out of steam, and the market is not yet ready to reward privacy coins for strong on-chain indicators.
For whales, the picture is less clear. For Zcash large long positions were opened below $410, and now many of them are already in profit from 15% to 37%. The total unrealized profit of such trades exceeds $8.5 million. This fits well with the network picture of Zcash, where user activity remained high even after the vulnerability story.
For Monero the situation is different. Large long positions were opened in the range from $337 to $407, and now they remain in the red. But large holders are not in a hurry to close deals. It seems they are betting that the growing number of transactions and stable hashrate will later be reflected in the price.
Distribution of large holders’ positions for ZEC and XMR. Source: Nansen.
There is also a signal that does not fit the bullish picture. Over the past seven days, Zcash inflows to exchanges reached about $42.5 million. This is about 3.3 times higher than the average level. Such movements often appear before large holders start selling coins after a rebound.
Here lies the main contradiction. On the one hand, on-chain data looks strong enough, and some large holders continue to hold positions. On the other hand, smart money are short, and the increased ZEC inflow to exchanges may indicate preparation for selling. Therefore, the current growth cannot yet be considered a clear reversal signal.
This difference is even better illustrated by the example of Cardano. There, the deterioration affected not only investor sentiment but also real activity indicators. That is why comparison with ADA helps to understand where it is just market fear and where users are really starting to leave the network.
Why Cardano Is Mentioned Here at All
Cardano is included in this analysis for a reason. Around the same period, the project also faced worsening sentiment. The reason was reports that some applications related to the Charles Hoskinson ecosystem began to shut down.
But in the case of Cardano the picture differs from the situation around Zcash. The comparison shows the difference between a typical blow to trust and a real decline in network interest. The clearest indicator here is active addresses.
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During last year’s growth, activity in the Zcash network significantly exceeded the yearly average. Then the indicators decreased, but still remained above usual levels. Even in early June, the Zcash active address index was about 342 points.
For Cardano the situation was weaker. The same indicator was around 91 points and had already fallen below its base. That is, in Zcash users continued to make transactions even after the vulnerability story, while in Cardano the data looks more like a gradual decline in engagement.
This is what makes the comparison important. Privacy coins suffered from fear and bad news, but their networks did not show such a sharp deterioration. For Cardano , as sentiment fell, user metrics also weakened, which looks more like a real outflow of activity.
Cardano and Zcash: network activity comparison. Source: Charlie Quant Lab.
This comparison forms the main argument in favor of privacy coins. Zcash entered a correction with fairly strong on-chain indicators. The price fell, sentiment worsened, but users did not leave the network. For the market, this is an important detail, because recovery usually looks more convincing when there is real activity behind it.
Against this backdrop, some market participants believe that the privacy coin sector may be near a local bottom. Unlike Cardano, where declining activity was accompanied by weakening network interest and the departure of some projects, Zcash, Monero and other privacy coins do not yet show this pattern.
Even amid negative news, users continued to make transactions, and key network metrics remained relatively stable. Therefore, the current rebound cannot be attributed only to speculation. It has a foundation, although the market has not yet given full confirmation of a reversal.
What On-Chain Data Shows Now
Putting all the signals together, the picture around privacy cryptocurrencies remains mixed. The networks look much better than the prices, but the positioning of large players still calls for caution.
The main plus is the state of the networks themselves. For Zcash, Monero, Dash and Decred user activity, transactions, volumes, and mining have declined much less than quotes. This indicates that interest in using privacy coins has persisted even when the market was selling tokens sharply.
Zcash stands out in particular. Despite the vulnerability story, the network continued to show stronger activity than projects where a real user outflow is visible. For comparison, analysts cite Cardano, where declining engagement looks much more obvious.
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But there is also a downside. Smart money still holds short positions on Zcash and Monero, and ZEC inflows to exchanges remain much higher than usual. Such movements often appear before sales, especially if the coin has already rebounded after a sharp drop.
As a result, the market is caught between two signals. On-chain data and some whales point to recovery, while smart money shorts and increased exchange inflows warn that growth may quickly meet sellers.
Therefore, the current rebound cannot be called empty. There are real networks and sustained user activity behind it. But it is too early to say that the sector has already fully reversed upward. Privacy coins have a chance for recovery, but the next moves will show whether buyers can maintain this momentum.
