ZEC shows resilience following a rally sparked by Grayscale interest and a surge in privacy tokens, but experts warn of a potential reversal.
Market Stability Amid Broader Tension
Zcash was trading around $274 at last check — slightly below its weekly high of $280. The price remained steady despite massive liquidations triggered by new Trump-era tariffs.
The token initially dropped to $210 as panic selling gripped the market. This resulted in over $95 million in liquidations, as exchanges closed long positions.
What Sparked the ZEC Rally?
The surge began after Grayscale announced plans to launch a fund tracking Zcash performance. While not officially confirmed, speculation suggests that with enough demand, the company may apply to convert it into a spot ETF.
Additionally, renewed interest in privacy tokens like Dash, Horizen, and Monero contributed to the upward momentum.
High Funding Rates and Excessive Leverage
Despite the rally, market data indicates signs of overheating. Funding rates have hit record highs—suggesting traders are heavily leveraging to bet on upside movement.
When long positions start paying significant amounts to shorts, it signals an overly bullish market sentiment. This kind of euphoria often precedes a correction.
Technical Reversal Signals
Technical indicators are also flashing red:
- Relative Strength Index (RSI) stands at 82 — in the extreme overbought zone.
- Stochastic Oscillator reads above 89 — another sign of market overheating.
According to Wyckoff Theory, Zcash is now in the “markup” phase—typically followed by distribution and then markdown. This suggests investors may soon start taking profits, potentially leading to broader sell-offs.
Market cycles show that euphoric rallies are often followed by sharp and sudden corrections.
What’s Next for ZEC Price?
If current conditions persist, ZEC may correct back to the critical $100 level — nearly 60% below its current price.
Such a move would align with typical post-rally behavior driven by hype and excessive speculation.
Conclusion
Zcash’s price is holding firm despite broader market pressure, buoyed by Grayscale’s interest and the privacy token rally. But extreme overbought conditions, record leverage levels, and classic technical signals suggest that a downward reversal may be near.
Frequently Asked Questions
Find answers to the most common questions below.
ZEC has been buoyed by Grayscale’s interest and a surge in privacy tokens like Monero and Dash.
Yes, technical indicators like RSI and funding rates suggest the asset is overbought and may soon retrace.
Analysts point to $100 as a key support level, representing a potential 60% drop from current prices.
This article is for general informational purposes only and is not intended to be, and should not be construed as, legal or investment advice. Crypto-assets are highly volatile, so only invest funds that you are willing to lose and use your own research and risk management.
