Zcash Drops 21% From Peak Amid ETF Outflows and North Korean Hacker Rumors, But This Rally May Not Be Over Yet

Insight: After surging 253%, Zcash has pulled back 21%. With Grayscale ETF daily outflows exceeding $30 million and suspected North Korean hackers utilizing its privacy pool to move stolen funds—under this triple pressure, the market's top concern is: Is this a pullback or an end? Using on-chain data and indicators, this article breaks down whether this privacy coin rally has another leg.

Zcash had a rough Thursday. ZEC is currently priced at $1,333.50, down 7.29% intraday, with about three hours remaining until the daily close.

This means the privacy coin has retraced about 21% from its peak of $1,698.00 touched at the end of September. It also highlights how aggressively ZEC rallied: climbing roughly 253% from its starting point of $480.72 to reach that high.

The broader market offered little respite either. Bitcoin surged to $85,600 after Wednesday's PCE inflation data came in below expectations, only to quickly retrace those gains. The 10-year US Treasury yield closed at 5.29%, and according to CME FedWatch data, the probability of a Federal Reserve rate hike in October has dropped below 50%, down from 70%.

Looking first at ETF capital flows. Grayscale launched the Zcash ETF, ticker ZCSH, on August 25, attracting $233 million in net inflows by mid-September.

Yesterday, the fund recorded $30.25 million in net outflows, bringing cumulative net inflows down to nearly $268 million. Its 3-for-1 stock split officially took effect that morning as well.

The Bitget hack is another factor to consider, especially for market sentiment. A group of hackers stole approximately $387 million from the exchange on September 24, surpassing the initial estimate of $351.6 million—due to additional transfers later found on the Zcash and Tron blockchains. Bitget's CEO stated that the attack aligns with characteristics of North Korean hacker groups, though exact attribution remains under investigation.

This is undoubtedly bad news for cryptocurrency, which is striving to build a good reputation on Wall Street.

On Wednesday, blockchain investigator ZachXBT flagged 2,746 ZEC (approximately $3.9 million) flowing from hack-related addresses into Zcash's privacy pool—where senders, receivers, and amounts are all hidden.

This hack incident is unlikely to be the trigger for today's drop, and the $3.9 million scale is relatively limited, but it certainly didn't help matters.

What the charts say

Overall, Zcash remains in a strong bullish setup, but the price action over the past five days points to a significant correction.

The Relative Strength Index (RSI) is a momentum indicator ranging from 0 to 100. The current reading is 50.2, sitting in completely neutral territory, indicating ZEC is neither overextended nor oversold. Technically speaking, compared to the persistent overbought readings during the previous uptrend, this represents some relief.

The Average Directional Index (ADX) reads 52.0. ADX measures trend strength, not direction, and any reading above 25 signifies a genuine trend. 52 is a very strong level, but it primarily reflects that prior vertical surge. Additionally, since ADX is lagging, it may remain elevated even as prices fall.

The Exponential Moving Average (EMA) tracks average price but weights recent days more heavily. The 50-day EMA remains above the 200-day EMA, keeping the trend structure technically bullish on paper.

If the downtrend continues, these two lines will converge—an early sign of a trend change. However, for that to happen, Zcash would need a sustained and rapid crash, which is unlikely in the short term.

A rally ending, or a dip worth buying?

A 21% pullback after a 253% rally is not uncommon. In June, ZEC dropped from $635 to an intraday low of $309 after a critical privacy pool vulnerability was disclosed. It subsequently rallied all the way, ultimately breaking through $1,600.

So at least for now, chart interpretation leans more toward a pullback than a crash. Trend indicators haven't turned bearish yet, but momentum has cooled, and the ETF just recorded $30.25 million in outflows.

If the daily candle closes below $1,233.00, the golden zone will be activated; while reclaiming $1,410.72 would signal the rally is back on track.

The views and opinions expressed by the author are for reference only and do not constitute financial, investment, or other advice.

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