Zcash Price Holds Ground After Grayscale Spark, Yet Warning Signs Mount

The Zcash price remained steady near its highest point this week, continuing to receive bids despite the recent downturn in the cryptocurrency market. 

The Zcash (ZEC) token was trading around $274 at last check, down slightly from this week’s high of $280.

ZEC price short-squeeze started last week when Grayscale announced plans for a new fund tracking the coin. While Grayscale did not mention it, the company is likely to file to convert it into an exchange-traded fund if it sees increased demand. It also jumped as privacy coins like Dash, Horizen, and Monero soared.

Like other coins, Zcash price crashed to $210 as investors panicked and sold following President Donald Trump’s new tariffs. This crash resulted in over $95 million in liquidations as exchanges closed their long positions. 

Still, there is a possibility that the coin will pull back for several reasons. First, the weighted funding rate has gone parabolic and hit its all-time high. Bullish sentiment appears to prevail, as longs pay shorts to maintain their balance. 

The surging funding rate is also a sign that many traders are using leverage to go long. While a rising funding rate is a bullish sign, an extreme one puts the coin at risk of a plunge due to the market’s overcrowded nature. It is also a sign of euphoria in the crypto market. 

Another reason the Zcash price may crash soon is that it has become highly overbought. The Relative Strength Index has moved to the extreme level of 82, while the Stochastic Oscillator has moved to over 89. Assets typically plunge when they become highly overbought. 

Most importantly, the coin is now in the markup phase of the Wyckoff Theory. This phase is followed by distribution and then markdown, where investors sell their assets to book profits. 

Therefore, if this happens, the ZEC price is likely to experience a strong reversal in the near term. If this happens, it may crash to the critical support at $100, which is about 60% below the current level.