The hidden concerns behind ZCash breaking the $500 mark: Can this rally continue?

1218% Surge in One Month, Technical Indicators Sound Alarm

ZCash(ZEC) broke through the $500 psychological barrier strongly in early November, creating an impressive upward trend. Since early August, ZEC has accumulated a 1218% increase, with October’s performance even surpassing most mainstream cryptocurrencies. Six consecutive green trading days, record-high trading volume, smooth candlestick patterns—all signaling to market participants that the bullish momentum of ZCash may not have ended.

However, when we examine the technical indicators, a different voice emerges. On the weekly chart, the MFI(Money Flow Index) reached 99.59, an extreme level never seen before in ZEC’s trading history. On the 4-hour chart, divergence between MFI and price was also observed, which is often regarded as a sign of waning upward momentum.

How High Can It Go? Two Key Targets Ahead

According to Fibonacci technical analysis, ZCash still has room to rise. The 61.8% extension level is around $591.6, and the 100% extension at $726.9 is also on many traders’ watchlists. If current market sentiment can be maintained, both targets theoretically have a chance to be reached.

From the weekly trend, once key resistance is broken, subsequent gains tend to be quite rapid. This explains why ZEC could achieve such an astonishing rally in just one month—once broken through, market participants flock in. However, extreme technical indicator readings also serve as a warning that the sustainability of this “rapid ascent” is questionable.

The Truth Behind the Surge: Fundamentals Have Not Changed

This brings us to the core issue. Well-known on-chain analyst Credibull Crypto pointed out on social media a often-overlooked reality—that ZCash’s fundamentals have not undergone substantial change in the past six months. In other words, the price increase is not driven by major project developments but by shifts in market narrative and sentiment.

This narrative began brewing in September and continued to push ZEC’s price higher thereafter. But every narrative has its lifecycle; no story can attract market attention forever. When the next hot topic emerges, funds may quickly shift away.

How to Respond Rationally: Risk Management Is Crucial

For traders considering buying at current high levels, here are some important precautions:

Margin Trading Risks: Using leverage at extreme highs is extremely dangerous. If the market pulls back, leveraged positions can be liquidated rapidly. Without clear stop-loss plans and risk management, reckless entries could lead to account losses.

Profit-taking in Batches: Instead of chasing the peak, consider taking partial profits at key resistance levels. Use $591 and $726 as targets, but don’t expect to sell everything at these points. The market usually doesn’t cooperate perfectly.

Set Clear Failure Points: Every trade should have a defined “if the price falls below this level, I will exit” plan. This is vital for protecting capital.

Final Advice

ZCash’s recent rally is indeed impressive, but it also reminds us to stay sober. When technical indicators reach historical extremes while fundamentals remain unchanged, it’s often the market’s highest emotional point—and also the most dangerous.

Enjoy the rally, but don’t get carried away. Take profits when appropriate, cut losses when needed. In this market, survival is more important than making big money.

Disclaimer: This article reflects analytical opinions and does not constitute investment advice.