The cryptocurrency market is facing a downturn, with its total value now around $2.89 trillion. Zcash (ZEC), a privacy-focused token that has been resisting the fearful market mood, is showing unstable price movements as buyers and sellers battle for dominance. Notably, analyst PlanD has pointed out significant downside risks ahead.
Despite holding up during the broader crypto correction, Zcash has struggled to break through the $750 resistance level. It has been pushed back twice in the past week after rising above $700.
PlanD notes that these repeated rejections are endangering an upward trend that started in October. Zcash has now fallen below the lower support line of this trend at $672 multiple times, suggesting growing selling pressure and a weakening upward structure. If bears take control, PlanD predicts a drop to around $281, which would mean a 50% loss from current prices. This aligns with another analyst, Ali Martinez, who also expects a correction to about $325 due to ZEC’s difficulties at the $750 mark.
However, while technical signals point to a possible decline, strong fundamentals offer reasons for optimism. Institutional support is growing, such as Cypherpunk Technologies—backed by the Winklevoss twins—launching a $50 million Zcash treasury plan. Additionally, the upcoming Zcash halving on November 28 is seen as bullish, as reduced token supply could increase demand and push prices higher.
Currently, Zcash is trading at $490.52, down 24.11% in the last 24 hours amid widespread liquidations totaling over $1.9 billion. Daily trading volume has decreased by 6.1% to $2.24 billion. Still, ZEC has gained 99.41% over the past month, defying the overall market drop of 28%. Over the last year, it has surged 928%, demonstrating strong and sustained growth. With a market cap of $7.8 billion, ZEC ranks as the 13th largest cryptocurrency globally.
Frequently Asked Questions
Of course Here is a list of FAQs about why Zcash might be at risk of a 50 drop with clear and direct answers
General Beginner Questions
1 What is Zcash in simple terms
Zcash is a cryptocurrency like Bitcoin but with a key difference it focuses on privacy It uses advanced cryptography to hide the sender receiver and amount of a transaction making it truly private
2 Why would the price of a cryptocurrency like Zcash drop so sharply
Sharp price drops are common in the volatile crypto market They can be caused by negative news major investors selling regulatory crackdowns or a loss of confidence in the projects future
3 I keep hearing about a halving What is that
A halving is a preprogrammed event that cuts the reward miners receive for securing the network in half It happens periodically to control the supply of new coins For Zcash this is often called the halvening
Specific Risks Causes for a Price Drop
4 What is the main reason Zcash might drop 50
The single biggest factor is the upcoming halving of the Miner Reward This will drastically reduce the daily selling pressure from miners but the uncertainty and potential for miner shutdowns can cause extreme price volatility and panic selling
5 How does the halving create a risk
Miners who receive ZEC as a reward often sell it immediately to cover costs After the halving their revenue is cut in half If the price doesnt rise enough to compensate some miners may be forced to shut down This could reduce the networks security and spook investors leading to a selloff
6 Are there other risks besides the halving
Yes Other significant risks include
Regulatory Pressure Governments are increasingly concerned about privacy coins and may try to ban or restrict them
Competition Other privacyfocused coins like Monero are strong competitors
Loss of Developer Funding A portion of the miner reward funds development The halving could impact this potentially slowing innovation
7 Could Zcash become less secure after the halving
Potentially yes If a significant number of miners stop operating because its no