Bitcoin News Today: Privacy-Driven Zcash Soars, but Overvaluation and Regulation Spark Correction Fears

Zcash (ZEC) has experienced a sharp 15% decline following a 200% surge that pushed the privacy-focused cryptocurrency to a three-year high. The rally, fueled by Grayscale's launch of the Zcash Trust and growing institutional interest in privacy-preserving technologies, saw ZEC soar 83% in 24 hours and 150% weekly. However, on-chain metrics and market sentiment now signal potential overvaluation, with social dominance reaching a five-year peak of 1.21%-a historical precursor to market corrections. Funding rates across major exchanges have fluctuated chaotically, reflecting trader uncertainty and speculative positioningZcash Rockets to Three-Year High, But Overheating Risks Loom^[1].

The Grayscale Zcash Trust, which offers accredited investors exposure to ZEC without direct custody, has drawn significant attention. As of September 2025, the Trust reported $16 million in assets under management, with a 2.50% expense ratioGrayscale Zcash Trust^[2]. While the product initially drove demand, its performance has diverged from ZEC's price, with shares trading at a discount to net asset value. This divergence underscores challenges in aligning institutional investment vehicles with volatile crypto assets.

ZEC's technical trajectory highlights both strength and vulnerability. The token has surged 454% year-to-date, outperforming all top 100 cryptocurrencies and even Bitcoin and Ethereum during the same periodZcash Rockets to Three-Year High, But Overheating Risks Loom^[1]. However, key indicators suggest caution: ZEC's Relative Strength Index (RSI) hit overbought levels, and its Fear & Greed Index climbed to 64, signaling speculative fervor. Immediate support levels at $134.48 and $112.72 now loom as critical price floorsZcash Rockets to Three-Year High, But Overheating Risks Loom^[1]. Analysts warn that a pullback could test these thresholds, particularly if market hype wanes.

Privacy narratives and regulatory dynamics have further complicated ZEC's outlook. Naval Ravikant's assertion that Zcash is "insurance against Bitcoin" has amplified its appeal amid central bank digital currency (CBDC) concerns. However, critics argue ZEC's price correlation with Bitcoin (currently at $118,000) undermines its role as a counterparty hedge. Meanwhile, regulatory pressures persist: ZEC has faced delistings on platforms like Binance FZE and OKX, though decentralized cross-chain swaps via ThorSwap have reinvigorated liquidity.

Bitcoin's recent performance adds context to ZEC's volatility. BTC's rally past $118,000 has drawn institutional inflows and ETF speculation, yet ZEC's 300% October surge outpaced Bitcoin's steady gains. This divergence reflects diverging narratives: Bitcoin as a macro hedge and Zcash as a privacy-focused alternative. However, ZEC's structural challenges-such as its 95% discount to its 2016 peak and regulatory scrutiny-pose long-term risks.

The coming days will be pivotal for ZEC. If bullish momentum holds, ZEC could target $161.35, but a retreat below $134.48 may trigger deeper corrections. Institutional adoption and privacy-driven demand remain critical variables, though market overbought conditions and regulatory headwinds suggest caution.