Zcash is facing one of its toughest corrections this year as altcoin prices continue to fall, wiping out much of October’s gains.
This sharp decline has raised an important question among investors: Was the recent “privacy token” hype an unsustainable bubble, or is there still long-term value behind ZEC’s fundamentals?
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Zcash suffers losses
The Relative Strength Index (RSI) reflects the strong bearish pressure surrounding Zcash. The indicator has fallen below the neutral mark of 50.0 and into negative territory, indicating that sellers are firmly in control.
This downward shift is often associated with weakening recovery potential, especially if bearish momentum continues to build. For ZEC to show a meaningful reversal signal, the RSI would have to reach an oversold condition, making a pullback statistically more likely.
However, ZEC has not yet reached that stage and its trajectory remains likely to be further downhill. The lack of a clear reversal signal highlights the current uncertainty and suggests that buyers remain hesitant to re-enter despite the deep discount from recent highs.
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Squeeze momentum indicators add another layer of concern. Earlier this month, this indicator showed increased compression, which usually portends greater volatility. That squeeze has now been released to the downside, coinciding with a strong wave of bearish momentum. When a squeeze release occurs during a downtrend, it often accelerates losses rather than stabilizing price movements.
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This change confirms that the bears are present and getting stronger. Coupled with the privacy coin story cooling down across the market, this indicator suggests more volatility and downward pressure may be in store for Zcash going forward.
ZEC price may fall further
ZEC previously posted a massive 1,442% rally during the peak of privacy token buzz. That momentum disappeared in early November, and the altcoin has crashed 56% from its highs since then.
A staggering 43% of this loss occurred in the last week alone, sending ZEC down to $323. If this trend continues, Zcash is likely to break below the $300 support level and fall towards $260 and even $204, further erasing the gains to date.
However, Arthur Hayes believes that the crypto market follows a clear yearly narrative. According to him, while 2025 revolved around the rapid expansion of AI-related tokens and stablecoins, 2026 will revolve around privacy. He said this shift could spark renewed interest in privacy-driven cryptocurrencies and the underlying technology that supports them.
Therefore, if buyers return to these discount levels, ZEC could attempt a rebound from the $344 area. A rally towards $442 and ultimately $520 would be required to invalidate the current bearish outlook.
