Zcash 70% surge flags Bitcoin correction risk, CryptoQuant warns

Zcash rose 70% in days to $779.38, pushing CryptoQuant's risk indicator to extreme levels and flagging overheating for Bitcoin.

"The coin just ripped 70% in a matter of days," Maartun, an analyst at CryptoQuant, said, adding that he is "more worried about Bitcoin than excited about Zcash" under the current market setup.

CoinGlass data confirms the overheating. Spot volume fell 24.97% and derivatives volume dropped 24.16% over 24 hours, while futures selling surged 101.68% in the four-hour timeframe. Borrowed funds totaling $1.53 billion remain locked in ZEC margin positions, more than 11% of the coin's $13.13 billion market capitalization.

If the $1.53 billion futures overhang faces forced liquidations, it could trigger a chain reaction across trading platforms. For Bitcoin, stuck in a $60,000-$80,000 range, panic in derivatives markets and liquidity outflows could push many participants into risk-off mode.

The warning comes as ZEC's rally unfolded against the backdrop of Grayscale's spot Zcash ETF (ZCSH), which debuted on NYSE Arca on Aug. 25. The fund recorded $14.8 million in first-day trading volume and closed at $63.10, down 1.54%. ZEC futures open interest declined 12% to $1.65 billion in the 24 hours after the ETF launch, with declines registered on Binance, OKX, and Hyperliquid.

Santiment data shows social mentions of ZEC spiked to roughly six times the August average on Aug. 22, reaching 232 mentions, before normalizing on launch day — a pattern consistent with "buy the rumor, sell the news" behavior. ZEC climbed about 65% from $509 on Aug. 18 to $852 on Aug. 23 before pulling back.

Futures Overhang Tests ETF-Driven Rally

Grayscale Research projects ZEC could reach $8,100 by 2030 if it captures 10% of Bitcoin's market capitalization, or $1,622 at just 2% market share. Zach Pandl, Grayscale's head of research, cited Zcash's privacy capabilities and quantum-computing preparedness as key drivers. But Galaxy Digital's head of research, Alex Thorn, pushed back, arguing that account-based blockchains are "privacy nightmares" by design and "substantially less private than UTXO-based chains like bitcoin."

The divergence between Grayscale's bullish thesis and the derivatives data highlights the speculative nature of the current move. ZEC's price has corrected to $779.38 from its peak, and the institutional hype surrounding the ETF appears fully priced in.

For Bitcoin, the historical pattern is the concern. CryptoQuant's data shows that abnormal Zcash growth during periods of BTC consolidation has often acted as a leading indicator of a marketwide correction. With Bitcoin trading in a narrow range and lacking buying activity, the derivatives stress in ZEC could drain liquidity from the broader market.

This article is for informational purposes only and does not constitute investment advice.