- Zcash team resigns, $ZEC drops 20%, Monero gains as leading privacy coin amid market uncertainty.
- Bitcoin open interest hits 2022 lows, signaling deleveraging and potential market reset.
- Stablecoins, rate cuts, and altcoin flows drive cautious but strategic investor moves.
Crypto markets faced turbulence as Zcash’s entire core development team resigned after a governance clash with the Bootstrap board. The team announced plans to form a new company to continue privacy technology development independently. Consequently, Zcash ($ZEC) plunged 20%, wiping out $1.6 billion in market capitalization.
Meanwhile, the community’s interest settled on Monero ($XMR), which gained significant momentum as the number one privacy-oriented crypto. In addition the community, whales were also extremely active in the price of $FARTCOIN, with a number of significant trades spotted. Notable sales were also seen in $ZEC and $RAY.
Bitcoin Deleveraging Signals Market Reset
Bitcoin also faced pressure, dropping to approximately $90,150 after failing to sustain $94,000. CryptoQuant analyst Arab Chain reported, “Historically, reaching similar levels since 2022 has preceded periods of consolidation or even bullish reversals.”
Open interest in BTC derivatives fell sharply, reaching its lowest since 2022. Binance led with –1.53 million BTC, followed by Bybit at –784K BTC and Gate.io at –505K BTC.
In addition, the synchronized drops in OKX, Deribit, Bitfinex, and HTX Global indicate a market deleverage, thus these levels are a result of a market reset, which removes excessive leverage in the markets.
Macroeconomic Moves and Stablecoin Developments
Meanwhile, Treasury Secretary Scott Bessent urged the Federal Reserve to accelerate interest rate cuts, citing lower rates as essential for stronger U.S. growth. Moreover, World Liberty Financial, backed by Donald Trump, applied for a U.S. national trust bank charter to issue its USD1 stablecoin, which now exceeds $3.3 billion in circulation.
Consequently, this charter could expand regulatory oversight and institutional adoption. Besides, Solana’s SKR airdrop and private credit access via ZIGChain continued fueling market chatter.
Investor Behavior Reflects Caution
Bitcoin and Ethereum spot ETFs experienced $486 million and $98 million in outflows on January 7, reflecting a tepid sentiment environment. It is worth noting that Solana experienced a modest influx of funds, thus reflecting selective investment in altcoins.
There was a filing for an Ethereum ETF with staking by Morgan Stanley, showing increasing demand for yield-generating cryptocurrency products. Further, there was a state-level adoption plan for Florida to direct public funds to Bitcoin.
