- Zcash volume bubble surpasses 2021 peak, indicating overheated trading.
- RSI shows bearish divergence, suggesting potential short-term correction.
- Retail activity on ZEC rises sharply, warning of profit-taking phase.
Zcash (ZEC) is showing signs of entering an extreme bubble phase, according to recent data from CryptoQuant. Trading metrics have now exceeded those recorded during the 2021 bull run, raising concerns among analysts about the sustainability of the ongoing rally.
On Tuesday, Ki Young Ju, CEO of CryptoQuant, cautioned investors on his X account. He stated, “Sorry, but you’re retail if you’re buying Zcash now,” suggesting the current market could be in a late-cycle distribution phase.
ZEC has gained over 750% in three months, drawing attention across the cryptocurrency market. Its recent surge has also boosted other privacy coins, further amplifying speculative activity.
Onchain Data Indicates Overheated Market Conditions
CryptoQuant’s “Zcash: Spot Volume Bubble Map” shows that current trading volumes and price activity surpass those of early 2021. The chart uses circle sizes to represent volume and color changes to indicate heating levels.
The analysis points to a distribution phase, where high turnover and slow price growth often precede corrections.
During a similar pattern in 2021, ZEC surged to nearly $300 before entering a prolonged decline. Analysts now warn that history could repeat if profit-taking accelerates and retail participation remains high.
Technical Indicators Signal Possible Near-Term Correction
At the time of reporting, ZEC trades slightly below $330, cooling after strong momentum earlier in the week. On the daily chart, the Relative Strength Index (RSI) shows bearish divergence, signaling weakening momentum.
If selling pressure increases, ZEC could retrace toward weekly support at $260.42. However, a recovery above $375.21 would invalidate the bearish setup and extend the uptrend.
Despite optimism from some traders, including Arthur Hayes, who projected a $10,000 target, onchain data suggests caution may be warranted as market conditions show signs of overheating.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
