Key Takeaways
Why did Zcash rally this week?
Zcash more than doubled after Naval Ravikant endorsed it as “insurance against Bitcoin.”
Will the uptrend continue?
It can if the financial privacy narrative continues. In the meantime, there could be a temporary cool-off.
On the 1st of October, Zcash [ZEC] exploded 62% and added an extra +20% at press time. Overall, the privacy-focused coin more than doubled this week.
It surged from $53 to a three-year high of $154.4 on the Binance exchange as of press time.
Source: ZEC/USDT, TradingView
The explosive upswing was triggered by shilling from renowned investor Naval Ravikant. He called it an “insurance against Bitcoin” amid an aggressive push for CBDCs (Central Bank Digital Currencies) in most countries.
He said,
“Bitcoin [BTC] is insurance against fiat. ZCash is insurance against Bitcoin.”
Ravikant added that even Satoshi can’t use Bitcoin because of surveillance.
Source: X
But that changes with Zcash. ZCash was created from the Bitcoin code base but encrypts transaction information for users to shield their assets.
Apart from the financial privacy narrative, the recent technical upgrades also fueled the explosive run. The next network upgrade (NU7) seeks quantum-proof and faster transactions.
Other privacy coins like Monero [XMR] also pumped, but not as hard as Zcash. But the froth in the Futures market could be a warning sign of a potential cool-off.
Is Zcash’s pullback likely?
According to CryptoQuant’s Futures Volume Bubble Map metric, Zcash was in an “overheating” phase. The reading is always associated with the late stage of an uptrend, or the beginning of a distribution.
A similar “overheating” reading coincided with local tops in 2024. The upswing could enter a cool-off or local top if past trends hold.
Source: CryptoQuant
Exchange flows turn red
The wave of Exchange Netflow also reinforced that some players were actively booking profits after the 2x run.
CoinGlass data showed about $21 million in Exchange Netflow, indicating more sell-off than accumulation this week.
Source: CoinGlass
Historically, Weekly Exchange Netflows of $20-$30 million marked past local and cycle tops. In short, late bulls jumping on the rally could easily be burnt if the profit-taking increases from here.
However, a pullback to around $100 could become a buying opportunity in case of an extended rally after the cool-off.
