Zcash plunged 26% within 24 hours, dropping to approximately $485 after reaching above $700 earlier this month, its highest level since early 2018. The sharp correction has sparked debate among traders and analysts about whether the privacy-focused cryptocurrency's rally has concluded or if the decline represents a temporary pullback before further gains.
What to Know:
- Zcash fell from above $700 to around $485, with the broader privacy coin sector experiencing similar losses as Monero dropped 9% and Dash declined 16%.
- Arthur Hayes, BitMEX co-founder, previously predicted ZEC could reach $1,000 or even $10,000, and his investment fund Maelstrom holds the cryptocurrency as its second-largest liquid position after Bitcoin.
- Technical analysts remain divided on ZEC's trajectory, with some viewing the decline as a mid-trend correction while others warn of potential drops to $344 or $235 if support fails.
Market Reaction and Expert Analysis
The cryptocurrency community has responded to the price movement with mixed assessments. Arthur Hayes, co-founder and former chief executive of BitMEX, questioned whether investors should exit their positions following the decline.
Hayes had outlined bullish projections for ZEC during recent weeks. Last week, he predicted the cryptocurrency would reach $1,000. He had previously set a target of $10,000, though that figure appeared substantially disconnected from current market conditions.
Maelstrom, an investment fund operated by Hayes, maintains significant exposure to Zcash.
The American entrepreneur disclosed days ago that the cryptocurrency represents the entity's second-largest liquid holding, surpassed only by Bitcoin.
Analyst Degen Sing offered a contrasting interpretation of the price action. The trader characterized the movement as a "textbook mid-trend pullback before continuation" rather than a reversal. Degen Sing identified $750 as the next major resistance level, noting the price had already tested that threshold. The analyst suggested Bitcoin reaching $110,000 would propel ZEC through that resistance.
Broader Privacy Coin Decline
Zcash's correction mirrors a wider downturn across privacy-focused cryptocurrencies. Monero traded at approximately $380, reflecting a 9% daily decline. Dash experienced more severe losses, falling 16% during the same period.
The total market capitalization of privacy coins contracted to roughly $27.6 billion.
This represents a 34% decrease measured over 24 hours, indicating sector-wide selling pressure rather than isolated weakness in ZEC.
Technical analyst Hardy presented a bearish scenario for Zcash's near-term outlook. Hardy warned that failure to maintain support at $487 could trigger further declines to $344 or potentially $235. The price had already breached that support level at the time of publication.
Understanding Privacy Coins
Privacy coins represent a category of cryptocurrencies designed to obscure transaction details. Unlike Bitcoin, where all transactions remain permanently visible on a public ledger, privacy coins employ cryptographic techniques to mask sender and recipient information. Zcash utilizes zero-knowledge proofs, a mathematical method that allows transaction verification without revealing underlying data.
These cryptocurrencies have attracted regulatory scrutiny in multiple jurisdictions. Some exchanges have delisted privacy coins due to compliance concerns. The regulatory uncertainty contributes to price volatility within the sector.
Closing Thoughts
Zcash's 26% decline has intensified debate over whether the cryptocurrency's multi-month rally has exhausted itself or merely entered a consolidation phase. The divergent views from market participants reflect uncertainty about both ZEC's technical position and the broader regulatory environment facing privacy coins.