Key Takeaways:
ZEC’s 500% October rally is fueled by celebrity endorsements and short liquidations.
A rising wedge pattern now warns of a potential 30% correction toward the $260–$270 support zone in November.
Zcash (ZEC) is spooking cryptocurrency bears this Halloween, as it is one of the few coins seeing significant gains on Friday.
The privacy-focused cryptocurrency rallied 7.75% to $390.75, its highest level since 2018. In comparison, the crypto market’s capitalization fell 2.50% in the same period.
ZEC price is up nearly 500% in October, contrasting with the crypto market’s 4.50% loss.
What’s behind Zcash’s monstrous comeback?
Crypto celebs pump ZEC price
High-profile endorsements have supercharged ZEC’s bullish narrative.
The Zcash price began to surge after renowned investor Naval Ravikant called it an “insurance against Bitcoin” in an Oct. 1 post. 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 floated a $1,000 target, pulling Zcash into the social spotlight and catalyzing momentum traders to pile in.
Most recently, BitMEX co-founder Arthur Hayes stoked the ZEC uptrend with a $10,000 call, leading to a 30% rise in ZEC’s price.
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These pumps are similar to what the Dogecoin (DOGE) market experienced in 2021. The memecoin jumped at an average of 33% following Elon Musk’s posts in its favor, according to researcher Dabian Fablander.
ZEC short liquidations add fuel to the rally
Short liquidations have added rocket fuel to Zcash’s price surge.
ZEC futures have seen nearly $65 million in cumulative liquidations in the past two weeks, with more than half of it coming from short positions, according to CoinGlass estimates.
This imbalance suggests that ZEC’s breakout has been 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 the pump days.
The feedback loop of liquidations-triggered buying, coupled with a persistent FOMO among retail traders, has helped sustain the rally well beyond its initial catalyst.
ZEC technicals hint at a 30% correction
On the daily chart, ZEC is forming a rising wedge, a pattern often preceding bearish reversals after extended uptrends.
The wedge’s upper boundary currently sits near $450, suggesting that ZEC may still edge higher toward this apex before momentum fades.
However, a bearish divergence between the token’s rising price and declining RSI readings (currently near 74), coupled with falling trading volumes, suggests that buying strength is waning.
The pattern could confirm a 30% drop toward the $260–$270 area in November if sellers push ZEC below the wedge’s lower trendline.
The $260-270 area aligns 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 trading move involves risk, and readers should conduct their own research when making a decision.