Zcash (ZEC) prices soared just after the Securities and Exchange Commission (SEC) closed an investigation that had been ongoing for over two years. With the regulatory risk removed from the ZEC, the market renewed its bullish conviction. Buyers stormed the market, driving the price up.
Zcash continues its rally despite market selling off at $600
Zcash is rising exponentially, breaking all the barriers that were hindering its movements. Although bullish momentum appeared to weaken as the token approached the $600 level, triggering a wave of profit-taking and short-term selling pressure, the market structure now appears to be shifting again. After using the $500 support level, the privacy token is once again on the rise.
The rebound from support may indicate that traders still view pullbacks as accumulation opportunities rather than signs of a larger trend reversal. Often, strong rallies experience temporary cooling periods as early investors lock in profits and new participants wait for better entry levels.
If buyers continue defending the support range and trading volume begins increasing, the recent recovery could strengthen market confidence and potentially create momentum for another move higher.
Zcash refuels waning momentum with SEC’s dropping investigation
Zcash was able to convert the waning bullish momentum into another rally as the SEC dropped an investigation it launched into ZEC, the privacy coin. The SEC case was not a public lawsuit against the Zcash Foundation, nor did the regulator formally accuse it of wrongdoing.
The investigation began in August 2023, when the foundation received a subpoena under a broader SEC inquiry titled “In the Matter of Certain Crypto Asset Offerings (SF-04569).” The SEC was examining aspects of crypto asset offerings and potentially whether activities linked to Zcash could raise issues under U.S. securities laws. However, the agency never publicly detailed specific allegations against the foundation.
A major reason the investigation attracted attention was Zcash’s identity as a privacy-focused cryptocurrency. Privacy coins have often faced regulatory scrutiny because features that obscure transaction details can raise questions around compliance and financial transparency.
After more than two years of review, the SEC informed the foundation that it would not recommend enforcement action, penalties, or operational changes, effectively closing the matter without charges. This was a significant positive signal for the traders to buy the coin.
Zcash fluctuates inside a bull flag
The chart below shows ZEC trading inside a bull flag while it forms another smaller bull flag at the top of the larger bull flag. A bull flag is a continuation pattern that forms after a strong upward price movement, known as the flagpole, followed by a temporary consolidation phase where the price moves slightly downward or sideways within parallel trend lines. Inside the pattern, the market is usually undergoing a pause rather than a reversal.
From a market psychology perspective, buyers initially push the price sharply higher, creating strong momentum and attracting attention from traders. After the rapid rise, some investors begin taking profits, causing the price to pull back slightly. At the same time, new buyers who missed the initial move often wait for a better entry point. This creates a controlled decline or sideways movement rather than a sharp sell-off.
The formation of the smaller bull flag at the top (near the $600 level) shows that the market was going into a sell-off with the prices nearing the $600 psychological level. The bulls were slowly losing control of the market as they saw the end of the rally. However, when SEC dropped the investigation, the market saw Zcash through a whole different set of lenses. They started to acquire again. This shot the prices up once again, creating a smaller bull flag.
Usually when the prices break out from the bull flag, there will be a rally that will take the prices as high as the flagpole. Given that ZEC take the traditional route, there is a high chance that it could cross above $750.