Zcash dips nearly 45%! Breakout above the channel to reach $4,750, is it still a crash?

Zcash (ZEC) experienced a 1000% surge in this cycle, but over the past two months, amid market downturns, it retraced 45%, falling from its all-time high to the edge level. However, in the last week, a key technical shift has occurred, with the price breaking through the previously guiding descending channel that led it lower, potentially retesting the all-time high. On the technical side, Zcash has formed a bullish pennant continuation pattern, RSI hovers near the neutral 50 level, indicating that buyers are currently dominating the trend.

45% retracement after a 1000% surge: healthy correction or trend reversal?

(Source: Trading View)

Zcash’s performance in this cycle has been remarkable. From the cycle low, ZEC achieved over 1000% gains, a explosive rally quite rare among mainstream coins, reflecting a renewed market focus on privacy coin narratives. However, the 45% correction over the past two months has left many investors confused: is this a healthy adjustment in a bull market, or a sign that the bullish trend has ended?

From a technical analysis perspective, a 45% retracement is not uncommon in crypto bull markets. Bitcoin in the 2017 and 2021 bull cycles experienced multiple corrections of 30% to 50%, but these did not alter the overall upward trend. The key is whether a higher low can form after the correction and whether new catalysts emerge to drive the next rally.

As the market sentiment remains subdued, Zcash has retreated to the sidelines, with attention shifting from privacy coin topics to macroeconomic and geopolitical news. This shift is typical market rotation. In early bull phases, capital usually flows first into Bitcoin, then Ethereum, and finally into altcoins. When macro uncertainty rises, funds tend to flow back into safe-haven assets like Bitcoin, putting short-term pressure on altcoins.

The technical shifts seen in the past week offer hope for bulls. The price broke through the previous downward channel, which is the first signal of a trend reversal. The breakout indicates selling pressure has been fully released, and buyers are regaining control. If confirmed, Zcash may be retesting the all-time high.

Bullish pennant pattern suggests continuation of upward movement

(Source: Trading View)

From the daily chart, Zcash is forming a bullish pennant continuation pattern. This pattern typically appears during short-term consolidation after a strong rally, with the price oscillating within a narrowing triangle, accumulating energy for the next breakout. The pennant is classified as a continuation pattern, implying that the breakout direction is likely to be in line with the prior trend, i.e., upward.

This pattern rules out the possibility that this correction is just a consolidation within a larger bull move. A breakout would mark the price testing the lower support of the pennant and then reaching new highs, focusing on the resistance above, indicating a potential larger breakout. Based on the pattern measurement, the height of the pennant is roughly half of the prior rally, so the target after breakout is typically the length of the flagpole added to the breakout point.

Momentum indicators support this outlook. RSI hovers near the neutral 50, and MACD is forming a golden cross near the signal line. Both suggest that buyers are currently in control. RSI rebounded from oversold territory to neutral, often signaling that selling pressure has been exhausted and buying is resuming. The MACD golden cross is a classic buy signal, indicating the start of a new upward phase.

Three major bullish signals on Zcash’s technicals

Breakout of descending channel: Price successfully moved above the channel top, indicating selling pressure has been relieved

Formation of pennant: A typical bullish continuation pattern, usually leading to further gains upon breakout

Strengthening momentum indicators: RSI back to 50, MACD bullish crossover shows buying dominance

Key threshold to confirm the breakout is near the all-time high of $745. This would open the door for a new price discovery phase and push the price toward the pennant target of $4750, achieving another 1000% rally. From the current price around $300, $4750 represents roughly 1500% upside, which, while aggressive, is not entirely impossible.

Privacy coins’ new positioning in institutional markets

The concept of privacy coins has found new significance in a market cycle dominated by institutions. Previously, privacy coins were delisted from mainstream exchanges due to regulatory concerns, but this situation is changing. Institutional use cases require privacy protections but also need to comply with selective disclosure rules. Zcash’s zk-SNARKs technology meets this need, enabling transactions to maintain privacy while allowing regulators to access specific information selectively.

This “compliant privacy” positioning opens new market space for Zcash. Banks and financial institutions need to protect trade secrets and personal privacy when handling client transactions but must also meet AML and KYC requirements. Zcash’s technical architecture can strike this balance, making it a candidate for enterprise-grade privacy solutions.

As cryptocurrencies gain deeper exposure through products like Grayscale Zcash Trust and potential ETFs in traditional finance, it’s reasonable to believe Zcash has not yet fully realized its demand potential. The Grayscale Zcash Trust provides qualified investors a way to gain exposure without directly holding ZEC, lowering technical barriers and custody risks. If a Zcash ETF gets approved, it would further facilitate institutional capital inflows.

However, achieving this goal may depend on whether Zcash recognizes its role in the transition from Web2 to Web3, i.e., through the adoption of TradFi and inclusion in mainstream asset portfolios. Zcash needs to demonstrate that its technology can not only protect individual privacy but also meet enterprise-level compliance and performance requirements.

Feasibility and risk assessment of the $4750 target

The key threshold for confirmation is near the all-time high of $745. The target of $4750 based on the pennant pattern would realize another 1000% increase. This target is derived from technical pattern measurement, but multiple conditions must align for its realization. First, the macro environment must shift toward risk appetite, with funds flowing back into the altcoin market. Second, Zcash needs concrete fundamental catalysts, such as ETF approval, major exchange listings, or significant technical upgrades.

From a market capitalization perspective, $4750 for ZEC implies a fully diluted market cap of about $70 billion (given a total supply of 21 million). This scale would place Zcash within the top ten cryptocurrencies, surpassing many current mainstream coins. Such a market cap leap, while aggressive, is not impossible in a bullish frenzy—many altcoins surged to extraordinary levels during the 2021 bull market.

However, risks are also clear. If Zcash fails to break the $745 high, it could form a double-top pattern, a classic bearish reversal signal. Additionally, regulatory uncertainties around privacy coins remain; if major economies tighten restrictions, demand could be suppressed. Technically, breaking below the lower boundary of the pennant would invalidate the bullish structure and may trigger further declines.

Investors should closely watch the $745 level, as it will determine whether Zcash enters a new phase of price discovery or forms a top at a high level.