Zcash bulls face rotation reality check after breakout rally

Raoul Pal says Zcash’s surge still looks like short-term rotation, with the real test coming as the privacy coin tries to build a durable base after its spike.​

The recent surge in privacy-focused cryptocurrency Zcash (ZEC) may reflect short-term capital rotation rather than the start of a durable bull market, according to Real Vision founder and macro investor Raoul Pal.

Speaking on the When Shift Happens podcast with Kevin Follonier, Pal stated that Zcash’s rally has yet to prove it represents a structural trend rather than speculative repositioning within the broader crypto market.

Zcash and the broader crypto market

“Do I need that asset to say I was in earliest? I don’t really,” Pal said, suggesting that recent price action alone is not enough to justify long-term conviction.

Zcash has posted some of the strongest gains among major cryptocurrencies this year, though momentum has faded in recent weeks, with the token pulling back over the past month, according to market data.

“We can’t prove it until the whole market goes up and it continues to trend and not a rotation,” Pal said. “Right now it’s confirming the rotation thesis.”

The next key test for Zcash will be whether it can establish a stable base after its sharp move higher, Pal stated. Sustained support at lower levels would indicate that buyers are stepping in with longer-term conviction, rather than exiting after a rapid run-up.

“What you want to see is whether it finds a base and then starts pulling up again,” he said.

Despite the strong year-to-date performance, Pal said he is not inclined to chase the asset at current levels. “I’m not sure I’m going to chase it, but I might buy it in the next down cycle,” he added.

Zcash’s rally has stood out in a broader market that has struggled to maintain upward momentum. Part of that surge followed comments from crypto entrepreneur Arthur Hayes, who said in late October that Zcash could eventually reach a much higher price, triggering a sharp short-term price reaction.

Interest in privacy-focused assets has increased amid growing concerns around surveillance, censorship, and regulatory scrutiny, according to market observers. XT Exchange reported that anonymity-focused tokens were gaining renewed attention as traders reassessed the role of privacy in digital assets.

Institutional interest has begun to follow. Grayscale Investments filed with the U.S. Securities and Exchange Commission to convert its Zcash trust into a spot ETF, signaling a potential pathway for broader investor exposure.