A rally that climbs almost 1000% in a few weeks usually feels unstoppable. ZEC did exactly that and pulled in a wave of excitement across the market. Momentum carried the Zcash token into a zone traders called unbelievable. A run like that rarely goes unnoticed.
Then everything paused. The Zcash price settled into a sideways range between $741 and $424, and the mood shifted. Signals across the chart and on-chain activity now suggest that ZEC might be approaching the edge of its climb.
Insights shared by the analyst from Gerhard – Bitcoin Strategy on YouTube lay out why the token might be headed for a crash
What you'll learn 👉
ZEC Price Action Shows A Tired Rally
A peak around $720 came before a pullback of about 30%. Gerhard pointed out that this wasn’t shocking because Bitcoin dropped by a similar percentage during the same period. Correlation makes the ZEC token heavily dependent on Bitcoin strength. So when the leader slips, ZEC usually follows.
Relative performance data shows how the ZEC price exploded late in September. Zcash outpaced BTC by more than 1000%. Higher highs appeared on the chart, and each higher high pointed toward potential supports.
Gerhard explained that those supports are positioned at underperformance zones of 10% and 24% versus Bitcoin. A move into those zones would not look unusual based on its history. Zcash spent several years deeply underperforming Bitcoin until this sudden upside shock. The comeback looked dramatic, although it arrived after a long era of heavy losses.
Zcash Price Mirrors Market Cap Pressure
Market cap trends lined up with older peaks. The Zcash token reached roughly $8B in earlier cycles and then reversed. The current market cap behavior resembles those earlier peaks, which is why Gerhard noted this pattern as a warning.
The ZEC token also exists as a ported version on the Binance Smart Chain. Around 20,000 wallets hold that version. On-chain data from BSC shows that new daily users peaked on November 7. Activity has been fading since then. Returning users dominate the charts rather than fresh wallets entering. A flattening user base signals slowing enthusiasm.
This is also when ZEC relative to BTC topped out and then dropped by 42%. The bounce that followed seemed to rely less on new buyers. Gerhard pointed out that something else was pushing the recovery because new wallets weren’t increasing.
ZEC Token Distribution Leans Toward Smaller Holders
Wallet data adds another layer to the picture. Smaller wallets holding around 2 ZEC jumped from 2,700 to 3,200. Medium wallets holding 20 ZEC grew as well.
Large wallets holding 200 ZEC saw only mild growth. Gerhard interpreted this as stronger retail participation rather than deep pocket accumulation. Smaller investors appear more active than whales right now. That imbalance usually weakens a rally over time because retail buyers cannot support extended pumps on their own.
October 10 delivered a violent liquidation event across many altcoins. Longs were wiped out on perpetual futures. The overall altcoins market cap plunged by 47%. ZEC dipped, although the drop was milder. Recovery came fast compared to many peers.
Open interest barely moved, which meant traders didn’t get liquidated at the same scale. Open interest has now reached historical highs. Gerhard noted a tight correlation between open interest and the Zcash price. More leverage tends to push the price up and vice versa. Heavy leverage usually plays a big role when a rally becomes fragile.
Trading volume hit numbers close to $10B per day. Extreme volume aligned with extreme attention. Gerhard described this as a red flag because volume at that level rarely holds. As volume drops, momentum often weakens.
Funding rates also caught his attention. Many tokens saw deeply negative rates during the crash. ZEC moved in the opposite direction because buyers absorbed the sell pressure. Later, the funding rate flipped negative again. Gerhard suggested that retail traders likely shorted while market makers quietly took the opposite side, pushing the price to trigger liquidations in a short squeeze.
ZEC Token Still Reacts To Macro Momentum
Crypto as a whole has been under pressure. Bitcoin slid roughly 19% over the past 2 weeks. Zcash struggled because the entire market leaned downward. Gerhard emphasized the heavy influence of Bitcoin and macro conditions.
Long term Bitcoin holders have been selling into this environment. Those wallets weigh on the overall market. Whenever they pause and accumulate again, recoveries usually begin. Until that shift arrives, negative momentum stays strong.
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Sideways movement between $741 and $424 shows uncertainty. A massive run brought ZEC into overextended territory. Wallet data displays slowing growth. Leverage sits near extremes. Trading volume hovers near unsustainable highs. Retail traders appear more active than large investors.
Gerhard connected all these pieces to the rising probability of a ZEC price downturn. None of the signals point toward imminent collapse, although they suggest that Zcash might not maintain its explosive climb.
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