The crypto market has a way of surprising everyone, and ZCash (ZEC) is the latest to grab all the attention. After rising by more than 400% this October to around $316, can buyers still jump in, or is this still one of those pumps and crashes that ZEC has experienced in the past?
According to analyst Gerhard from the Gerhard – Bitcoin Strategy YouTube channel, the story might be more complex than most could think. He believes what we’re seeing now could be a repetition of ZCash’s past patterns a mix of sharp rallies and brutal reversals that have defined its history.
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ZCash Price Shows Strong Momentum but Echoes Past Patterns
Gerhard pointed out that ZCash has experienced multiple pump-and-dump cycles over the years. Each pump has been bigger than the last, but every time the excitement faded, the ZEC price came crashing down. This time, though, the situation looks a bit different.
He noted that when comparing ZCash’s long-term chart to Bitcoin and other altcoins, the ZEC token has started to show signs of strength it hasn’t displayed in years. “ZCash has stabilized versus Bitcoin,” Gerhard said, suggesting that it’s no longer underperforming as badly as before.
Still, he warned that while the current price action looks powerful, history shows that such rallies often face strong resistance once the market cap grows too high for manipulation to remain profitable.
Speculation Drives Much of the ZEC Price Movement
Gerhard explained that much of ZCash’s rally seems to come from leveraged speculation rather than real spot market demand. Spot trading volume on Binance sits at about $467 million, while perpetual futures volume reached over $2 billion.
That means the ZEC price is being shaped more by traders betting on short-term price movements than by long-term holders buying the token. He described this as a “player versus player” market where traders are squeezed out by market makers taking advantage of leverage and sentiment.
According to Gerhard, open interest the total value of active positions hit around $500 million this cycle, five times higher than the peak of the last major ZCash rally. This level of speculation could make the market unstable once funding rates normalize and short squeezes lose power.
Short Squeezes May Be Behind the ZEC Token Surge
One of the most striking insights from Gerhard’s analysis is that ZCash’s pump could largely be the result of a cascading short squeeze. Many traders were betting on ZEC’s price to fall, expecting it to continue underperforming.
When the price stabilized against Bitcoin, market makers began buying up the token on the spot market, forcing short positions to close at a loss. This fueled rapid upward moves every retracement brought in new short bets, which were then squeezed again, pushing the ZEC token even higher.
While this creates dramatic short-term gains, Gerhard cautioned that such rallies don’t last forever. As open interest grows and it becomes more expensive to keep pushing prices higher, the momentum may fade, potentially leading to a sharp correction.
What Happens Next for the ZCash Token?
Gerhard believes the best way to understand what might come next is by watching the funding rate on platforms like Coinglass. Once the funding rate the cost of holding long or short positions returns to normal, the market could settle into a new equilibrium.
He also noted that ZCash now has lower inflation compared to its early years, which may help its long-term performance. A slower-growing supply could allow it to maintain value better than other altcoins that suffer from heavy token unlocks and inflationary pressure.
Still, he reminded viewers that this doesn’t mean ZEC is immune to pullbacks. “After the short squeeze finishes, we might see a retracement,” he said, suggesting that ZCash could trade more in line with the broader altcoin market once the hype fades.
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ZCash’s massive 400% climb this month has certainly turned heads, but according to Gerhard, much of the move seems fueled by leveraged speculation rather than organic growth. The ZEC token may have matured in terms of tokenomics, yet the market remains volatile and heavily driven by futures activity.
Whether this pump is the start of a sustainable trend or just another setup for a reversal depends on how the funding rates and open interest evolve in the coming weeks
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