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Key tips:
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ZEC’s 500% October rally is fueled by celebrity endorsements and short liquidations.
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A rising wedge pattern now warns of a potential 30% correction towards the $260-$270 support zone in November.
Zcash (ZEC) is spooking cryptocurrency bears this Halloween, as it is one of the few coins to see significant gains on Friday.
The privacy-focused cryptocurrency rallied 7.75% to $390.75, its highest level since 2018. In comparison, the crypto market capitalization fell 2.50% over the same period.
The price of ZEC is almost 500% in October, in contrast to the loss of 4.50% of the crypto market.
What’s behind Zcash’s monstrous comeback?
Crypto celebs pump ZEC price
High-profile endorsements have supercharged ZEC’s bullish narrative.
The price of Zcash started to rise after the renowned investor Naval Ravikant called is an “insurance against Bitcoin” in a post from October 1. It jumped by more than 60% on the day and has continued its upside momentum ever since.
Mert Mumtaz, co-founder and CEO of Helius, a Solana-focused development company, publicly posted a target of $1,000, pulling Zcash into the social spotlight and catalyzing momentum traders to accumulate.
More recently, BitMEX co-founder Arthur Hayes fueled ZEC’s trend with a $10,000 call, leading to a 30% increase in the price of ZEC.
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These pumps are similar to what the Dogecoin (DOGE) experienced market in 2021. The memecoin jumped to an average of 33% after Elon Musk’s posts in his favor, according to researcher Dabian Fablander.
Short ZEC liquidations added fuel to the rally
The short liquidations have added fuel for the guns to the Zcash price increase.
ZEC futures have seen nearly $65 million in cumulative liquidations over the past two weeks, with more than half coming from short positions, according to CoinGlass. estimates.
This imbalance suggests that ZEC’s crash was driven by a classic short squeeze, where traders betting against the privacy coin were forced to close their positions as prices rose.
Adding fuel to the upside is retail FOMO, as evident in Internet search spikes for the keyword “Zcash” throughout October, especially around pump days.
The feedback loop of liquidation-triggered buying, coupled with lingering FOMO among retail traders, helped sustain the rally well beyond its initial catalyst.
ZEC technicals indicate a 30% correction.
On the daily chart, ZEC forms a rising wedge, a pattern that often precedes bearish reversals after extended trends.
The upper boundary of the wedge currently sits near $450, suggesting that ZEC may yet advance higher towards this apex before the momentum fades.
However, a bearish divergence between the token’s rising price and declining RSI readings (currently near 74), accompanied by falling trading volumes, suggests that buying power has waned.
The pattern could confirm a 30% drop towards the $260-$270 area in November if sellers push ZEC below the lower trend line of the wedge.
The area of $260-270 aligned with the 20-day exponential moving average (20-day EMA, represented by the green wave).
This article does not contain investment advice or recommendations. Every investment and business move involves risk, and readers should do their own research when making a decision.
