Zcash Under Pressure: Is a Deeper Correction Looming After Explosive 1,500% Rally?
Zcash (ZEC) is experiencing a significant price pullback, plummeting over 25% from its recent seven-year high of nearly $744. This sharp correction follows an astonishing 1,500% parabolic rally, leaving investors and analysts debating whether the privacy coin's historic ascent has finally peaked or if this is merely a temporary dip before further gains.
Market Signals Point to Potential Downturn
The dramatic surge in ZEC's value began in early September, breaking through long-term resistance levels around $400. However, the current correction has raised red flags among some market observers. Veteran trader Altcoin Sherpa cautioned that extended, steep rallies often conclude with "a sharp and painful collapse." This sentiment is echoed by technical indicators, with ZEC's Relative Strength Index (RSI) recently hitting an extreme overbought level of 94.2—a reading not seen since its 2017-2018 bull market peak. On daily charts, ZEC appears to be confined within a corrective channel, suggesting further downside unless a strong support level emerges. Analysts like "Greeny" have highlighted that Zcash's current rally is the longest in its history, historically preceding drawdowns of 45% to 90%.
Conflicting Outlooks: Correction or Consolidation?
While a deeper correction towards the $300-$400 range is anticipated by many, not all analysts share a bearish outlook. Technical analyst Valdrin Tahiri, for instance, argues that ZEC's MACD and RSI, despite being overbought, show no bearish divergence, suggesting the current pullback could be a temporary correction rather than the start of a prolonged downtrend. If the $400 level holds as support, Zcash might stabilize before resuming its broader bullish trajectory. Adding to the bullish narrative, BitMEX co-founder Arthur Hayes recently reiterated his positive stance on Zcash. Hayes believes that both ZEC and Bitcoin could benefit from potential renewed U.S. fiscal stimulus. He postulates that increased government liquidity historically drives demand for privacy coins like Zcash, as investors seek decentralized and censorship-resistant assets in an environment of expanding monetary supply. Long-term holders continue to view Zcash's innovative zk-SNARKs technology as a core driver, positioning it as a key player in privacy innovation, and remain confident in its potential for a remarkable comeback.
