Zcash (ZEC) experienced a sharp price correction, dropping approximately 18% from its peak of $176 to around $144, following a parabolic rally that saw gains of 240% over the past month. This surge was fueled by key catalysts, including the launch of the Grayscale Zcash Trust and integration with ThorSwap, which boosted investor sentiment.
Technical indicators suggest the market is overbought, with the RSI hovering at 75, indicating potential for further cooling. Key retracement levels are in focus: initial support lies near the 0.382 Fibonacci level at $122, while a deeper correction could extend to the 0.618 level around $90, representing a mean reversion after the steep climb.
According to Ki Young Ju, CEO of CryptoQuant, Zcash investors are betting on a migration of illicit and gray-area funds from Bitcoin and stablecoins to privacy coins as global anti-money laundering (AML) regulations tighten. This narrative is supported by data from Messari, showing an 804% surge in Zcash's mindshare, and Google Trends, which reports the highest search interest in five years.
Social media sentiment, including comments from influencers like Naval, frames Zcash as a hedge against financial surveillance, with phrases such as "Zcash is insurance against Bitcoin" gaining traction. Despite the correction, analysts view this as natural profit-taking rather than a reversal, with ongoing discussions about privacy coins' role in an increasingly regulated environment.
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