Zcash (ZEC), the well-known privacy token, has taken a sharp turn after last week’s impressive run. The coin fell by 10% in the past 24 hours, cooling down from an explosive rally that had caught traders’ attention. The correction reflects a market pausing to digest the recent surge in activity and price momentum.
Market exhaustion after fast gains
The dip comes as momentum indicators flash caution. The Stochastic RSI has been stuck in overbought territory, hinting that ZEC’s rally may have stretched too far too quickly. Analysts suggest the asset might retrace further to rebalance, with potential downside levels around the $120 mark.
Trading volume explodes during sell-off
One of the most striking elements of ZEC’s recent price action has been the surge in turnover. Data from Messari shows that daily trading volume ballooned from about $500 million to more than $4 billion within a single session. Such sudden spikes often reveal a mix of speculative entry and profit-taking a combination that tends to fuel volatility.
Circulating supply adds fuel to volatility
ZEC’s price swings are further amplified by its supply dynamics. Figures from Token Terminal indicate that only around 30% of the total supply is actively circulating. This scarcity in available liquidity means that even modest changes in buying or selling pressure can trigger disproportionately large price moves.
Futures market shows buyers stepping in
While spot prices have cooled, derivatives activity paints a slightly more optimistic picture. CryptoQuant data highlights an increase in long positions in the Futures market. If sustained, this influx of leveraged buying could act as a cushion, potentially slowing or even reversing the recent decline. On the flip side, heavy selling pressure could wipe out overextended longs, deepening the correction.
Volatility defines the short-term outlook
For now, the near-term path for ZEC is uncertain. The token sits at the crossroads of elevated volume, stretched technicals, and unstable sentiment. The coming days will reveal whether this is simply a healthy cooldown following strong gains, or the start of a deeper reversal.
What’s clear is that Zcash is entering a phase of heightened unpredictability. Traders should expect more sharp swings as supply constraints, derivative positioning, and technical exhaustion continue to shape the next move.
