Privacy coin demonstrates resilience with technical indicators signaling potential breakout following institutional backing and surging on-chain adoption
Zcash has rebounded sharply from a critical ascending trendline that has anchored the privacy-focused cryptocurrency since late September, setting the stage for what technical analysts believe could be a sustained rally toward the psychologically significant $320 level - representing a potential 25% gain from current prices.
The token surged to a four-year high of $304.40 on October 21, 2025, before stabilizing around $256 during Friday afternoon trading in Asian markets, according to data from crypto.news.
At this price point, ZEC has delivered explosive returns of over 240% since the beginning of October and sits an astounding 560% above its September lows, marking one of the most impressive performances in the cryptocurrency market this cycle.
Grayscale Catalyst Ignites Institutional Interest
The rally's catalyst emerged when asset management giant Grayscale announced the launch of its Zcash Trust (ZCSH), providing institutional investors with a regulated vehicle to gain exposure to the privacy coin.
The fund, which carries a 2.50% expense ratio, has already attracted between $29.89 million and $85 million in assets, according to multiple industry reports - a remarkable achievement for an altcoin that had languished below $50 for much of 2025.
Market experts believe the Grayscale Trust represents more than just another investment product. "This could eventually lead to the conversion into an ETF if investor demand picks up," noted analysts at 99Bitcoins, drawing parallels to how previous Grayscale trusts have evolved into fully regulated exchange-traded funds.
The institutional infrastructure is complemented by high-profile endorsements from figures like Naval Ravikant, the AngelList co-founder who sparked debate by calling Zcash "insurance against Bitcoin."
Privacy Adoption Reaches Critical Mass
Beyond institutional capital, Zcash's rally has been underpinned by genuinely strengthening fundamentals within its network ecosystem. According to data from CoinMetrics, the total value of shielded ZEC has climbed to a record 4.5 million to 4.91 million tokens, worth over $1.26 billion.
These shielded coins now represent approximately 27.5% to 30% of the total circulating supply, up from just 23% before the recent price surge began.
Remarkably, around 1 million ZEC were moved into shielded pools in just three weeks, even as the token's price increased fivefold. Rather than taking profits during this extraordinary rally, users have continued transferring coins into privacy-enhanced addresses - a behavior that stands in stark contrast to typical cryptocurrency market dynamics.
"Signal: watch the Zcash shielded pool relative to ZEC price. Those who shield their ZEC don't sell," explained Josh Swihart, CEO of Electric Coin Co., the organization stewarding Zcash development. The observation has been echoed by community members noting the phenomenon: "Normal crypto behavior: pump → exchange → dump. Zcash behavior: pump → shield → zodl. This isn't speculation. It's adoption of privacy tech."
The growing shielded pool effectively reduces the circulating supply available for trading, creating natural upward pressure on price as demand increases. With ZEC's total circulating supply at 16.34 million coins, the locked shielded amount represents a substantial portion of the market, potentially amplifying price movements in either direction.
Privacy Coin Sector Catches Fire
Zcash's remarkable performance has lifted sentiment across the entire privacy coin sector, which had been largely dormant following years of regulatory pressure and exchange delistings. According to data compiled by CoinDesk, privacy tokens have rallied an average of 15% in recent 24-hour periods, with the sector showing multi-day strength that suggests genuine rotation rather than a fleeting speculative pump.
Peers have posted notable gains over the past month: Railgun (RAIL) has surged 157% to 184%, reaching new all-time highs, while Dash has climbed approximately 60% to 100%, breaking out of a five-year downtrend. Even Monero (XMR), often considered the gold standard for blockchain privacy, has posted gains between 10% and 22% despite facing delisting pressures from major exchanges.
The broader privacy coin category has delivered 112% year-to-date gains according to Artemis data, significantly outperforming most other cryptocurrency sectors in 2025. Trading volumes have surged in tandem, with ZEC alone recording over $1.1 billion in spot volume during peak trading days - a dramatic increase from earlier in the year when the token languished in obscurity.
Technical Setup Suggests Further Upside
From a technical perspective, Zcash has demonstrated textbook bullish behavior by consistently respecting an ascending trendline on the four-hour chart that has served as support since late September. Each time the token has retested this critical level, it has been followed by sharp rallies over subsequent days before profit-taking temporarily stalled momentum.
Momentum indicators paint an increasingly bullish picture. The Moving Average Convergence Divergence (MACD) shows buying pressure gradually building, with the red histogram bars shortening - often a precursor signal that bearish momentum is weakening and a crossover may be imminent. Meanwhile, the Relative Strength Index (RSI) currently sits at 54 after climbing above the neutral 50 mark, indicating growing bullish momentum without yet entering overbought territory that could trigger immediate profit-taking.
Given these technical signals, analysts believe there's a strong probability that ZEC could extend its upward trajectory. If the current trend continues, the next key level to watch will be the October high at $304.40. A clear breakout above this resistance, accompanied by strong volume, could pave the way for a move toward the psychological resistance level at $320 - a target that sits approximately 25% above current prices and would represent a new multi-year high for the privacy coin.
However, traders should remain mindful of potential downside risks. A close below $247 would likely trigger profit-taking and could raise pressure toward the $188–$155 liquidity zones, where support from earlier in the rally might provide a floor for renewed accumulation.
Final thougths
As privacy concerns intensify globally and institutional infrastructure continues developing, Zcash appears well-positioned to capitalize on renewed interest in confidential transactions.
Whether the current rally represents a sustainable shift or a temporary rotation remains to be seen, but the confluence of institutional backing, genuine on-chain adoption, and bullish technical setup suggests that privacy coins - led by Zcash - may be entering a new chapter in their evolution.
For traders and investors, the coming weeks will be critical in determining whether ZEC can break decisively above $300 and establish new price discovery zones, or whether the rally will consolidate before another leg higher. Either way, the dramatic resurgence of this once-forgotten sector has captured the attention of the broader cryptocurrency market.