Investors turn to DUSK after missing the waves of XMR and DASH, but the data raises warnings.
The cash flow of the group of investors interested in privacy coins is showing signs of shifting towards smaller market capitalization projects, amid the context where many large-cap assets like Monero (XMR) and Dash (DASH) have experienced significant increases and are beginning to show signs of slowing down.
In this wave of rotation, Dusk (DUSK) emerges as a new choice, attracting attention mainly due to its price movements and strong liquidity increase in a short time.
On January 19, when Bitcoin fell nearly 3% below the 93,000 USD mark and most other altcoins adjusted from 5-10%, DUSK recorded an increase of about 40%, at one point exceeding 0.22 USD.
This is the highest price range of DUSK since January 2025. Since the beginning of 2024, the price of DUSK has increased more than four times, a significant increase compared to the general market during the same period.
Data from Arkham shows that the total trading volume of DUSK on centralized exchanges exceeded 1.4 billion USD in just one week, the highest in the past year.
At the time of writing, DUSK is among the privacy coins with the highest 24-hour trading volume, ranked just behind ZEC, XMR, and DASH according to CoinGecko. This reflects the increasing participation of short-term capital, especially from retail investors.
On a foundational level, Dusk is built around encryption solutions such as zero-knowledge proofs and zk-SNARKs, allowing transaction information to be concealed from the community while still maintaining the ability to verify and retrieve data when necessary.
This approach differs from the absolute anonymity model of some traditional privacy coins, which often face increasing legal pressure in many regions.
According to my observations, the direction of DUSK reflects an effort to balance privacy and compliance requirements, a factor that may help the project become more accessible to businesses and organizations in the long term.
However, this also means DUSK does not fully serve the group of users with strict anonymity principles, which is the core community of many early privacy coins.
In addition to the technological factor, the rise of DUSK is also driven by market sentiment. After strong increases of XMR and DASH, many investors believe that the growth potential of assets with billion-dollar market capitalizations within the same narrative has narrowed.
This leads cash flow to tend towards smaller projects, where profit expectations remain high. With a market cap of just over 100 million USD, DUSK has become one of the most mentioned options in this phase.
However, on-chain data shows signals that warrant caution. According to Arkham, on the two days of January 16-17, the amount of DUSK deposited into exchanges surged above 6 million tokens per day, the highest in the last 30 days.
The listing of a token on exchanges is often accompanied by the ability to take profits, especially in the context of prices having risen rapidly in a short period.
Moreover, in previous cycles, the phenomenon of cash flow shifting from large-cap assets to smaller-cap altcoins within the same theme often appears in the later stages of a trend, when expectations have largely been reflected in prices.
When combined with the fact that market sentiment is beginning to become more cautious in late January, the risks for late buying positions at the current price level of DUSK are factors that cannot be overlooked.
@Dusk #dusk $DUSK
