Zcash, the privacy-focused cryptocurrency, is going through one of its toughest moments of the year after losing a significant portion of its valuation. Following a spectacular rally in October, the Zcash price correction has wiped out much of the accumulated gains, leaving investors wondering if the recent boom was simply an unsustainable bubble. The digital asset is now struggling to hold key levels as selling pressure intensifies in the market.
The Relative Strength Index (RSI) has dropped below the neutral 50.0 mark, sitting in negative territory. This technical indicator confirms that sellers are in full control, limiting any short-term recovery attempts. The lack of clear reversal signals suggests that buyers remain on the sidelines, fearful of entering a market that has not yet bottomed. For a meaningful bounce to occur, the RSI would need to hit oversold conditions, something that has not happened yet.
Furthermore, the “Squeeze Momentum” indicator has released its compression to the downside, which historically precedes periods of high negative volatility. This technical signal aligns with the 56% drop from recent highs, of which a staggering 43% occurred just in the last week. The current price of $323 leaves the asset in a vulnerable position, with the latent risk of breaking the psychological support of $300 and descending towards $260 or even $204.
Was the privacy token boom a passing fad or is there real underlying value?
The context of this drop is framed within the cooling of the “privacy coin” narrative, which previously drove ZEC to a 1,442% rally. However, Arthur Hayes, co-founder of BitMEX, offers a different perspective on market cycles. According to Hayes, while 2025 was dominated by artificial intelligence and stablecoin companies, 2026 will center on privacy. This cyclical rotation could reignite interest in the underlying technology of Zcash and other similar assets.
On the other hand, the current market situation reflects a disconnect between price and the long-term fundamentals that Hayes defends. If the Zcash price correction continues unchecked, it would confirm the thesis that the previous move was driven merely by speculation. Nevertheless, if buyers decide to return taking advantage of discounted prices, ZEC could attempt a bounce from the $344 zone. Reclaiming higher levels would be essential to invalidate the bearish outlook currently in place.
To conclude, Zcash’s immediate future depends on its ability to defend the vital support of $300. Although technical indicators like the RSI and Momentum point to further declines, the macroeconomic view suggests that privacy could become a protagonist again. Investors must closely watch if the asset manages to reclaim the $442 level, which would mark the first step towards real stabilization. Volatility will remain the norm while the market decides the fate of this privacy token.
