Zcash (ZEC) is pulling back sharply after a historic run, trading at $1,333.50 on Thursday—down 7.29% on the day, with roughly three hours left before the daily candle closes. That leaves the privacy-focused coin about 21% below the $1,698.00 peak it hit in late September, a reminder of how far it had climbed: roughly 253% from a $480.72 base to that high. The pullback is notable because it comes as one of the rally's core drivers—ETF demand—shows early signs of cooling.

The broader market offered little support. Bitcoin spiked to $85,600 on Wednesday after softer-than-expected PCE inflation data, then quickly gave back the gains. The 10-year Treasury yield closed at 5.29%, and the odds of an October Federal Reserve rate hike have fallen from 70% to below 50%, according to CME FedWatch—a repricing of rate expectations that traders across risk assets track closely for what it means for liquidity conditions.

ETF Flows Cool

Fund flows—fuel behind much of ZEC's rally—showed signs of cooling. Grayscale launched its Zcash ETF, ticker ZCSH, on Aug. 25, and the fund had attracted $233 million in net inflows by mid-September. On Sept. 30, however, the fund recorded a $30.25 million net outflow, leaving cumulative net inflows at almost $268 million. The fund's 3-for-1 share split also took effect that morning. Funds like ZCSH carry weight in the rally's math because they give traditional investors a way to gain ZEC exposure through standard brokerage account, which makes the fund's daily flow data one of the most visible gauges of demand for the token.

Bitget Hack Weighs on Sentiment

Sentiment has also been clouded by the hack of crypto exchange Bitget. A group of hackers stole about $387 million from the exchange on Sept. 24, a figure revised up from an initial estimate of $351.6 million once transfers on the Zcash and Tron blockchains were counted. Bitget's CEO has said the attack is consistent with North Korean hacker groups, but firm attribution is still pending.

The episode is an unwelcome development for a cryptocurrency trying to cement its reputation on Wall Street. On Wednesday, blockchain investigator ZachXBT flagged 2,746 ZEC—about $3.9 million—moving from hack-linked addresses into Zcash's shielded pool, where senders, receivers, and amounts are hidden. The amount is relatively small and was unlikely the trigger behind Thursday's drop, but it does little to help. It also spotlights a tension built into ZEC's pitch: the same shielding that defines the asset can obscure the trail of stolen funds—something that carries reputational weight as the coin works to win over institutional investors.

What the Chart Says

Despite the pullback, ZEC remains strongly bullish on balance, though price action over the past five days points toward a steep correction.

The Relative Strength Index (RSI), a 0-to-100 gauge of buying and selling momentum, sits at 50.2—dead neutral. ZEC is neither stretched nor washed out, a relief after the overbought readings it registered during the rally.

The Average Directional Index (ADX) reads 52.0. ADX measures how strong a trend is, not which way it points, and anything above 25 counts as a real trend. A reading of 52 is very strong, but it mostly reflects the vertical run—and because it lags, it can stay elevated while price falls.

Exponential moving averages (EMAs), which track average price while weighting recent days more heavily, remain bullish on paper: the 50-day EMA is still above the 200-day. If the slide continues, the lines will converge, which is usually how a trend change first appears—though that would require a sustained, rapid crash, which the analysis deems unlikely to happen soon.

Correction, Not Collapse—For Now

A 21% drop after a 253% sprint is not unusual for ZEC. In June, the coin fell from $635 to an intraday low of $309 when a critical vulnerability in its shielded pool was disclosed, then went on to climb past $1,600 in the months that followed.

The chart currently reads like a correction rather than a collapse. Trend indicators have not flipped, but momentum has cooled and the ZCSH ETF just posted a $30.25 million outflow. A daily close below $1,233.00 would put the "golden zone" in play, while a reclaim of $1,410.72 would put the run back on track. From here, the near-term markers are clear: whether the day closes above $1,233.00, whether ZCSH's flows stabilize in the sessions ahead, and whether investigators firm up attribution in the Bitget case.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice.

This article is based on reporting by Decrypt.