Zcash (ZEC ($329.56)) is exhibiting signs of entering an extreme bubble phase, according to a recent on-chain analysis. Current trading metrics exceed those recorded during its 2021 bull run peak.

On Tuesday, Ki Young Ju, CEO of on-chain data platform CryptoQuant, posted the sobering analysis on his X account. In doing so, he warned retail investors about the risks. He bluntly stated, “Sorry, but you’re retail if you’re buying Zcash now.”

CryptoQuant CEO Issues Stark Warning

The CEO shared a chart titled ‘Zcash: Spot Volume Bubble Map’ which tracks ZEC’s trading volume against its price since January 2020. In this visualization, the size of the circles indicates trading volume, while the color reflects the volume change rate (cooling, neutral, heating, or hyper-heating).

Zcash: Spot Volume Bubble Map. Source: CryptoQuant

The chart’s core interpretation relies on spotting a Distribution Phase. This phase is late in a bull cycle when trading volume is exceptionally high, but price appreciation is slow. This signifies that new investors are entering the market, leading to a massive turnover, or “handover,” of tokens from seasoned holders.

The chart shows a sharp period of high turnover that lasted about six months during the first half of 2021, when ZEC surged toward $300 per coin. This phase ultimately preceded a market-wide downcycle, which led to a price collapse and major losses for investors who bought ZEC at the end of the rally.

Current Metrics Surpass 2021 Peak

The most alarming finding is that the latest ZEC trading volume and price action register a larger bubble size than the one seen in the first half of 2021. If the broader cryptocurrency market is indeed in the final stage of its cycle, the analyst warns that a repeat of the 2021 collapse is highly possible.

ZEC has attracted massive attention recently, soaring by over 750% in the last three months. The cryptocurrency’s seemingly inexplicable rally has spurred price increases across the entire privacy coin sector.

High-profile figures have amplified the speculative frenzy surrounding ZEC. Former BitMEX CEO Arthur Hayes posted on X on October 26 that he expects the ZEC price to climb to as high as $10,000 per coin. At the time of this report on Tuesday, ZEC is trading around $328, up from $308 when Hayes made his prediction.

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