Zcash (ZEC) Drops 10% Amid Market Correction After Significant Rally

The price of Zcash (ZEC) has fallen by over 10% in the last 24 hours after experiencing a staggering 500% increase over the past month. This decline is attributed to profit-taking by major investors and traders, as ZEC enters a distribution phase following a remarkable rally fueled by key developments.

Factors Behind Zcash's Recent Price Decline

Despite a broader crypto market downturn, Zcash maintained its upward momentum, thanks to Grayscale's launch of the Zcash Trust for select investors on October 1, and Hyperliquid's announcement of ZEC listing with up to 5x leverage. Speculation of further price increases was bolstered by BitMEX co-founder Arthur Hayes, who suggested a potential target of $10,000 for ZEC, sparking significant buying interest.

However, CryptoQuant CEO Ki Young Ju emphasized that ZEC is now in a distribution phase, as indicated by the Zcash Spot Volume Bubble Map. Additionally, retail investors are actively purchasing Zcash, though the CryptoQuant CEO has confirmed selling his holdings after the substantial rally.

ZEC Profit-Taking in a Shifting Market

The Zcash price has dropped 11% in the past day, currently trading at $322.52, with a trading range between $322.78 and $371.59. A 50% reduction in trading volume suggests waning interest among traders. Profit-taking is evident, as indicated by selling signals and a high RSI of 80.88, marking ZEC as overbought.

Data from CoinGlass indicates significant selling activity in the derivatives market, with ZEC futures open interest declining 14% to $462.42 million within the last 24 hours. This includes a drop in open interest on major platforms such as Binance, Bybit, and KuCoin by 13%, 20%, and 30%, respectively.