Privacy-focused cryptocurrencies have re-entered the spotlight in recent weeks, outperforming major market players and attracting renewed interest. Monero (XMR) and Zcash (ZEC), known for their emphasis on confidential transactions, saw significant price increases in May.
This resurgence comes even as looming European regulations threaten the future of privacy coins. While Bitcoin grabbed headlines by reaching new all-time high, the major shift was the renewed investor interest in assets offering anonymity.
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Monero Holds Above Key Averages as RSI Cools Off
Monero (XMR) has experienced a sharp rally over recent weeks, moving from around $230 to a peak of approximately $425. This strong uptrend pushed prices well above key moving averages. The 20 EMA now sits at $354.6, which had previously served as solid short-term support during this rise.
The 50 EMA, currently at $307.35, remained untouched throughout the rally, showing the strength of bullish sentiment. The price held well above the 100 EMA at $270.36 and the 200 EMA at $236.61, showing strong momentum and confirming trend direction during the run-up.
Even with the recent drop to $346.01, XMR still trades above the 50 EMA. The strong surge above $400 has not been fully retraced, suggesting some strength remains. The pullback could be a healthy correction after an extended bullish move, rather than a full trend reversal.
RSI data reinforces this view. The RSI climbed as high as 78.30, showing overbought conditions before pulling back to 51.62. This reset gives room for renewed upside, especially if the price stabilizes above the 20 or 50 EMA. Short-term volatility remains, but the broader structure still leans positive.
Read also: What is Monero (XMR)? Here’s All You Need to Know
Zcash Rallies 46% in May
Zcash (ZEC) has seen a solid upswing recently, now trading at $53.5. The price has surged from around $36 in early May to over $56 at its peak. This rally broke above all major EMAs – 20 ($46.06), 50 ($41.54), 100 ($40.03), and 200 ($39.68).
The bullish momentum was confirmed when Zcash crossed its 200 EMA near mid-May, a strong technical signal. The consistent higher lows and sharp upward candles suggest steady buyer interest. The current price remains well above all EMAs, indicating firm short- and long-term trend alignment in favor of bulls.
The Relative Strength Index (RSI) is at 69.4, bordering overbought territory. Though not yet extreme, it hints that buying pressure remains high. RSI support at 64.6 reinforces strength in momentum, showing limited selling during recent pullbacks and potential for extended gains if volume sustains.
Volume and price action near $56 suggest resistance, with minor rejection visible. Still, higher lows and EMA stacking favor continued upside. Unless RSI crosses above 70 and sharp selling follows, ZEC’s chart structure supports more potential to test highs again, provided overall market sentiment stays supportive.
Regulatory Danger
Despite their strong market performance, privacy coins are facing increasing scrutiny. The European Union is preparing new rules under the Anti-Money Laundering Regulation (AMLR), which will come into effect on July 1, 2027. These rules could limit how Monero and Zcash operate within regulated environments.
One of the most significant elements of AMLR is a direct ban on privacy coins. Crypto service providers and financial institutions across the EU will not be allowed to handle cryptocurrencies designed to obscure transaction information. This ban targets coins that use enhanced privacy protocols, placing XMR and ZEC directly in the crosshairs.
In addition to the ban, the new regulations will eliminate anonymous crypto accounts. Service providers must ensure that all account holders are identified, removing the possibility of pseudonymous or anonymous ownership. This aims to align crypto accounts with the standards that exist in traditional banking.
Another key rule under AMLR involves mandatory identity checks for transactions over €1,000. Both the sender and recipient will need to verify their identities for any transaction above this threshold. The rule is designed to track larger crypto transactions and limit the use of these platforms for illegal activity.
Read also: EU’s New AML Regulations: The End of Privacy Coins by 2027?
Final Words
Privacy coins like Monero and Zcash have made a strong comeback, drawing attention with their price rallies and performance against major coins like Bitcoin. Despite short-term pullbacks, technical indicators remain supportive of further gains.
However, regulatory pressure is building. With the EU’s AMLR set to ban privacy coins and anonymous accounts, the long-term future of these assets in regulated markets is uncertain. While momentum currently favors bulls, looming restrictions could cap growth and push privacy-focused activity further toward decentralized or unregulated platforms.
Read also: Ethena Labs Leaves German Market Amid MiCA Compliance Pressure
