ZCash Drops 14% – But Traders Anticipate $1,000 ZEC Surge: What’s Behind It?

Despite a significant 14% drop in ZCash (ZEC), traders are optimistic about a potential rally to the $1,000 mark. Factors such as increased miner profitability, rising hash rates, and renewed investor interest are contributing to this positive sentiment. Key market players like Arthur Hayes are indicating a growing confidence in ZEC’s price recovery.

Key Takeaways

Increased miner profitability, a higher hash rate, and a surge in trading volume are driving bullish sentiment.
Spot investors have resumed accumulating ZEC, with notable figures like Arthur Hayes expressing strong confidence.
Although ZEC experienced a sharp decline, market indicators suggest a potential rally is on the horizon, driven by miner activity and retail interest.

ZCash eyes $1K breakout as miner activity, spot demand hint at rebound

Can ZEC Reach $1,000? Price Dynamics Explained

A closer examination of ZEC’s price dynamics indicates that the cryptocurrency often breaks above the $1,000 mark before encountering significant resistance. This expectation follows its recent breakout past several reversal points on the chart, steering the asset towards what is known as the "Top Price" zone.

ZEC price chart.
Source: Alphractal

If ZEC rallies to the $1,000 region, it would establish a new all-time high for the cryptocurrency, entering a phase of price discovery. However, this price point also aligns with the asset’s previous peaks, suggesting the possibility of a subsequent decline once it reaches that level.

Factors Favoring ZEC’s Upside Momentum

Several elements may significantly boost ZEC’s performance in the market. One important indicator is the Puell Multiple, which evaluates miner profitability on an annual scale. Current data shows that miners remain profitable, with no signs of large-scale selling.

Miner profitability chart.
Source: Alphractal

Additionally, the network’s hash rate has seen a sharp increase, meaning that more transactions are being verified by miners. This uptick in hash rate is indicative of heightened network activity, bolstered by a 138% surge in ZEC’s trading volume over the last 24 hours, reaching $4.61 billion. This leap highlights a renewed engagement from market participants.

Spot Investors Are Back

After a period of continuous selling from November 3rd to November 7th—during which approximately $153.49 million worth of ZEC was offloaded—spot investors have rejoined the market. In the past 24 hours, as of this writing, these investors accumulated $34.46 million in ZEC, marking a positive shift that reflects regained confidence, especially among long-term holders.

ZEC spot exchange netflow.
Source: CoinGlass

Overall investor sentiment seems to be improving. Arthur Hayes, co-founder of BitMEX, recently announced that his family office, Maelstrom, has made ZEC its second-largest liquid position after Bitcoin. He stated, “Due to the rapid ascent in price, $ZEC is now the 2nd largest LIQUID holding in @MaelstromFund’s portfolio behind $BTC.”

This development reinforces a bullish outlook for ZEC, suggesting that confidence among spot investors could continue to grow in the days ahead.