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Monero's price and volume are skyrocketing in spite of increasing regulatory pressure. Over the past day, the privacy-focused cryptocurrency has increased by more than 3% to $281. The staggering 3,900% increase in trading volume, however, is the true headline and indicates an overwhelming surge of demand and activity despite the crisis.
As centralized exchanges start to delist XMR in large quantities, it has become the target of a regulatory crackdown. Monero's privacy-by-default architecture is the cause. In contrast to Bitcoin or Ethereum, which provide pseudo-anonymity, Monero uses stealth addresses and ring signatures to conceal senders, recipients and amounts. Because of this, it is popular among users who respect their privacy, but it also directly conflicts with international AML and KYC frameworks.
A lot of places now categorize privacy coins like Monero as not adhering to financial transparency regulations, especially in Europe and some parts of Asia. In order to avoid scrutiny or penalties, centralized exchanges are proactively removing it in response to pressure to comply with local regulations. Regulators accusing exchanges of enabling illicit activity is something that they do not want to deal with, and this puts Monero in a difficult position.
Perhaps ironically, the surge is being fueled by this regulatory purge. This aggressive price spike and volume explosion are the result of traders and holders rushing to buy or transfer XMR before it is taken down from more exchanges. With a breakout from consolidation around $220 and a quick ascent to highs near $280, Monero has technically destroyed resistance levels.
Considering the nature of this move, momentum may continue to grow even though the RSI is currently at 79, indicating overbought conditions. In other words, Monero's rise is reactive rather than entirely organic. Fearing censorship, there is a rush toward decentralization.
However, XMR's prospects on centralized platforms are still bleak unless regulatory trends shift or it finds safety in DEXes and cross-chain protocols. The rally might last for a while, but its long-term viability hinges on how well it can adjust to life outside of the established exchange ecosystem.
Vladislav Sopov
Dan Burgin