Zcash's Bull Run Hits Overbought Wall: Support Levels Determine Next Move

Zcash (ZEC) has experienced a dramatic price surge of nearly 340% over the past month, reaching a four-year high of $298 before retreating to $225 in recent trading sessions. This volatility has sparked mixed technical signals, with analysts warning of potential corrections amid overbought conditions. The cryptocurrency's rally has been fueled by institutional interest, including the launch of Grayscale's Zcash Trust, which has attracted accredited investors and amplified demand for the privacy-focused asset. However, derivatives data and momentum indicators suggest growing bearish risks, with ZEC now trading below critical Fibonacci retracement levels and facing elevated sell-side dominance Zcash Surges 340% in a Month^[1]Zcash ($250) Price Prediction: Why ZEC's Technical Breakout …^[6].

Technical analysis highlights conflicting signals. While ZEC remains above its 20-period and 50-period exponential moving averages, the weekly Relative Strength Index (RSI) has surged to 79, indicating extreme overbought territory. Analysts note that such levels historically precede corrections, as seen in April 2021 when a similar RSI spike was followed by a 70% decline. On-chain data further underscores vulnerability: CoinGlass reports $3.57 million in long liquidations in the past 24 hours, outpacing short liquidations by a 6:1 margin. This imbalance suggests heightened forced selling pressure, particularly if ZEC breaks below the $235 Fibonacci support level, which could trigger a decline toward $200 or the 50% retracement at $193 Zcash Surges 340% in a Month^[1]Zcash ($250) Price Prediction: Why ZEC's Technical Breakout …^[6].

The privacy coin's recent performance has been amplified by its unique utility. Shielded Zcash (z-addresses) now account for 27% of the total supply, valued at $1.12 billion, as users prioritize anonymity amid global regulatory scrutiny. High-profile endorsements, including venture capitalist Naval Ravikant's characterization of Zcash as "insurance against Bitcoin," have further bolstered sentiment. Meanwhile, cross-chain integrations, such as THORSwap's shielded swaps, have expanded ZEC's liquidity and adoption .

Despite these fundamentals, short-term risks remain pronounced. Trading volume has spiked to $4 billion in a single day, exacerbating volatility due to ZEC's limited circulating supply (30% of total market cap). Overleveraged positions and profit-taking have led to a 10% pullback in the past 24 hours, with the Stochastic RSI lingering in overbought territory. Analysts caution that a sustained breakdown below $245 could trigger a cascading sell-off, potentially testing the $210.75 support level Zcash drops 10% after explosive rally^[2].

Long-term bullish arguments persist, however. If ZEC stabilizes above $235, it could retest the $300 psychological barrier, with some analysts projecting a move toward the 2021 high of $375. A successful breakout might extend gains to $336, aligning with the bull flag pattern on four-hour charts. Institutional inflows and macroeconomic tailwinds, including Zcash's upcoming halving in November 2025, are seen as catalysts for sustained demand Zcash Surges 340% in a Month^[1].

The market's next critical juncture hinges on ZEC's ability to defend key support levels. A close above $235 would signal continued bullish momentum, while a drop below $200 could trigger a broader correction. Analysts remain divided: while some view dips as buying opportunities, others warn that regulatory pressures and competition from newer privacy protocols could undermine ZEC's dominance. For now, the path of least resistance appears bearish, with overbought technicals and derivatives data pointing to a near-term consolidation phase Zcash ($250) Price Prediction: Why ZEC's Technical Breakout …^[6].