Zcash (ZEC) has been making waves in the cryptocurrency market, with a remarkable 500% rally in October that has left many wondering what’s behind its sudden surge. The privacy-focused cryptocurrency has been bucking the trend, rising 7.75% to $390.75, its highest level since 2018, while the overall crypto market capitalization fell 2.50% over the same period.
So, what’s driving Zcash’s monstrous comeback? One key factor is the high-profile endorsements from crypto celebrities, which have reinforced ZEC’s bullish narrative. For instance, renowned investor Naval Ravikant called Zcash “insurance against Bitcoin” in an October 1 post, triggering a 60% rise in its price. Similarly, Mert Mumtaz, co-founder and CEO of Helius, a Solana-focused development company, publicly announced a goal of $1,000, putting Zcash in the social spotlight and encouraging influencers to get involved.
Celebrity Endorsements and Short Liquidations
Most recently, BitMEX co-founder Arthur Hayes fueled the ZEC uptrend with a $10,000 call, resulting in a 30% increase in ZEC price. These pumps are similar to what the Dogecoin (DOGE) market experienced in 2021, where the memecoin rose an average of 33% after Elon Musk made positive posts about it, according to researcher Dabian Fablander.
In addition to celebrity endorsements, short liquidations have further accelerated the price increase of Zcash. CoinGlass estimates that a total of nearly $65 million was liquidated in ZEC futures over the past two weeks, with more than half of that coming from short positions.
Technical Analysis and Potential Correction
This imbalance suggests that ZEC’s breakout was driven by a classic short squeeze, where traders betting against the privacy coin were forced to close their positions as prices rose. Fueling the upward trend is retail FOMO, evident in spikes in internet searches for the keyword “Zcash” in October, particularly on pump days.
However, technical analysis suggests that ZEC may be due for a correction. On the daily chart, ZEC is forming a rising wedge, a pattern that often precedes bearish reversals after extended uptrends. The upper limit of the wedge is currently around $450, suggesting that ZEC may push further towards this top before the momentum fades.
A bearish divergence between the rising price of the token and falling RSI values (currently near 74) coupled with falling trading volumes suggests that purchasing power is weakening. The pattern could confirm a 30% decline towards the $260-$270 area in November if sellers push ZEC below the lower trendline of the wedge.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their own research when making their decision. For more information, visit https://cointelegraph.com/news/why-is-zcash-zec-the-only-crypto-pumping-right-now?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
