DUSK surges over 4 times in one month, are funds missing out on XMR and DASH now taking the risk of buying in?

On January 19, news reports indicate that within the privacy coin sector, rotation is accelerating. After missing out on the recent rallies of XMR and DASH, some investors are turning their attention to smaller market cap privacy projects like DUSK. However, despite strong price performance, on-chain data has begun to signal caution.

Recently, larger market cap privacy coins are generally considered to have entered a relatively saturated phase, with limited room for new gains, prompting capital to shift toward small and mid-cap targets. DUSK has emerged prominently in this context. In mid-January, amid Bitcoin’s correction and most altcoins weakening, DUSK surged approximately 40% in a single day, breaking through $0.22 and reaching a new high since early 2025. Since January 2026, DUSK’s cumulative gains have exceeded fourfold, with trading activity significantly increasing.

Fundamentally, the core reason for DUSK’s attention lies in its privacy technology approach. The project combines zero-knowledge proofs with zk-SNARKs mechanisms, hiding transaction details while maintaining verifiability for compliance purposes. This design is viewed by some investors as a balanced solution between “privacy needs” and “regulatory compliance,” offering more practical application potential compared to fully anonymous privacy coins. Hein Dauven, CTO of the Dusk Foundation, stated that this “default privacy, traceable when necessary” structure helps meet the needs of institutional and enterprise scenarios.

Meanwhile, external capital rotation is also a key driver of DUSK’s rise. As funds flow out of high-market-cap privacy coins, DUSK, with a market cap slightly above $100 million, has become a target driven by sentiment and capital, attracting substantial speculative buying in the short term.

However, on-chain data has begun to signal risks. Arkham’s fund flow data shows that from January 16 to 17, DUSK’s exchange inflow volume significantly increased, exceeding 6 million tokens in a single day, reaching a near one-month high. This is often seen as a sign that some early holders are starting to realize profits. After rapid appreciation, if selling pressure continues to grow, price volatility could become more pronounced.

In the privacy coin sector, capital tends to concentrate in low-market-cap projects during the latter stages of a rally. Coupled with recent market sentiment fluctuations, although DUSK remains a topic of interest, the risk of chasing highs is increasing. Investors should pay attention to profit-taking and sentiment shifts that could impact prices.