Zcash (ZEC), one of the leading privacy-focused cryptocurrencies, is showing alarming signs of entering an extreme bubble phase, according to new on-chain data from analytics platform CryptoQuant. The findings, shared by the company’s CEO Ki Young Ju, reveal that ZEC’s current trading behaviour exceeds even the frenzied levels seen during its 2021 bull market peak.
Posting his analysis on X (formerly Twitter), Ju delivered a stark warning to retail traders, stating bluntly, “Sorry, but you’re retail if you’re buying Zcash now.” His caution reflects deep concerns about speculative excess and a potentially overheated market environment surrounding the once-niche privacy coin.
ZEC’s ‘Spot Volume Bubble Map’ Shows Overheating Market
The warning was accompanied by a detailed chart titled “Zcash: Spot Volume Bubble Map”, which tracks the coin’s price and trading volume trends since early 2020. The chart visualises market conditions through a combination of bubble size and colour, representing, respectively, trade volume and the rate of change in that volume.
According to the data, ZEC is currently in what analysts call the Distribution Phase, a critical point late in a bull cycle. This phase is characterised by surging trading volume but diminishing price growth, signalling that large quantities of tokens are being “handed over” from long-term holders to newer, often less experienced investors.
During ZEC’s 2021 rally, this pattern lasted for roughly six months as prices climbed toward $300 per coin before the inevitable market correction. That phase ended with substantial losses for retail participants who entered near the top, a scenario that many fear could repeat itself now.
Current Metrics Exceed 2021 Bubble Size
Perhaps most concerning is CryptoQuant’s finding that the current ZEC trading volume and bubble magnitude now exceed those recorded in 2021, suggesting an even greater degree of speculative activity.
If the broader crypto market is indeed approaching the final stage of its cycle, the implications could be severe. On-chain signals such as heightened turnover, compressed price growth and inflated trading activity have historically preceded major reversals and Zcash appears to be ticking all those boxes.
Over the past three months, ZEC’s price has skyrocketed by more than 750%, propelling it from a relatively dormant asset into one of the most actively discussed tokens in the market. This surge has also lifted sentiment and prices across the privacy coin sector, which includes assets like Monero (XMR) and Dash (DASH).
Speculation Fueled by Influential Voices
The renewed interest in Zcash has been further intensified by high-profile endorsements. Among the most notable is Arthur Hayes, former CEO of BitMEX, who predicted on X that ZEC could soar to $10,000 per coin. His statement, made when the cryptocurrency was trading at around $308, helped amplify investor excitement and attract a flood of speculative capital.
As of Tuesday, ZEC is trading near $328, marking a steady rise in line with broader market enthusiasm. However, analysts warn that the euphoria may be masking underlying fragility. Without substantial fundamental drivers, such as major network upgrades or institutional adoption, much of the rally appears to be driven by momentum and hype rather than sustainable growth.
History May Repeat Itself
If CryptoQuant’s analysis proves accurate, Zcash could soon face a familiar fate, a dramatic correction following an overheated speculative surge. The parallels to 2021 are striking: rising trading volumes, retail-driven enthusiasm and overextended valuations.
For now, ZEC remains a focal point in the market’s ongoing debate over privacy, speculation and regulation. But as on-chain data continues to flash warning signals, investors may need to decide whether Zcash’s rally represents a genuine opportunity, or the calm before another collapse.
