Zcash Price News: Arthur Hays Sees 5x Gain Ahead for ZEC – Is That Even Possible?

Zcash (ZEC) has dropped by 7% in the past 24 hours alone as cryptos continue to face some strong selling pressure after their latest attempt to shake off the market’s bearish mood.

This privacy token is one of the few assets in the crypto market that has yielded a positive return this year, with a 12% gain.

Arthur Hays, founder of BitMEX and a prominent voice in the crypto space, commented in a recent interview that he sees Zcash rising by 5x over the next year.

“I think Near has a 20x potential, where you know Zcash might have a 5x potential over the next year, something like that,” he told the hosts of The Rollup podcast.

If Hayes’ predictions come to fruition, that would mean that Zcash could trade at around $2,500 – $3,000 12 months from now. But, is that a realistic forecast?

Zcash Bulls Get Squeezed as Rally Got Overheated

The war with Iran may have influenced buyers to resort to Zcash, as government surveillance for investors in the Middle East likely intensified.

ZEC offers shielded transactions via its Orchard and Sapling vaults. At the time of writing, shielded transactions sit at 20%, in line with usual levels. Recently, the metric dropped to just 10%, which typically occurs when speculative interest in Zcash has increased.

This happened as the token rallied to $680 — near our $700 target from a few days ago.

We are now expecting a strong pullback to $500 in the next few days, as momentum indicators were already overheated.

Cascade liquidations are contributing to ZEC’s latest decline. On-chain data from CoinGlass shows that $300 million worth of long positions have been wiped out today, with Zcash ranking in the 7th spot with $10 million worth of flushed-out longs.

This long squeeze started on May 25, when $16 million worth of bullish Zcash positions were taken out of circulation. This was the highest single-day wipeout since January 6. It highlighted that bullish positioning had gone too far and buyers were getting too optimistic.

RSI Readings Warned of a Pullback – Will the $500 Floor Hold?

Looking at the daily chart, we can see that the Relative Strength Index (RSI) had already posted a bearish divergence, as the price advanced to $680, but the oscillator made a lower high.

This is a clear indication that bullish momentum is slowing down, increasing the odds of a retest of the $500 support over the next few days. This was already a key support area during the latest rally.

Hence, we’ll have to see if there’s still strong buying interest at that level once the price gets there. Coming back to these levels so rapidly is not necessarily a good thing. Whether the price bounces back or not will fully depend on investors’ confidence that ZEC will continue to rally in the next few weeks.

Let’s keep in mind that Zcash traded at nearly $6,000 at some point. The token is currently sitting 90% below its all-time high. Hence, these are waters that the market has already tested in 2016.

That said, market conditions are quite different now. This project has a specific use case, one that could attract significant interest from individuals and organizations that want to keep their blockchain transactions completely off the grid.

A low percentage of shielded transactions at 20% indicates that ZEC continues to be a speculative bet primarily. We see a path to $1,000 if the $500 support holds, but the jury is still out on Hayes’ prediction for this privacy token.