$ZEC I’ve been bullish on ZEC since the market was calling it expensive around $400.
But every parabolic move eventually has to deal with mean reversion — and $ZEC is now reaching the kind of extreme deviation from its cycle mean that has preceded major pullbacks in previous rallies.
That doesn’t mean the top has to be in today.
It means the risk profile has changed dramatically.
At some point, price will need to rotate back toward its acceptance range and reset the excess built during this move.
The irony is that many who thought $ZEC was too expensive at $400 are now calling $1,200 cheap.
That’s exactly when late longs start piling into an already extended move.
Eventually, leverage gets flushed, price returns toward acceptance, and the market resets before the next expansion can begin.
I’m still bullish on the bigger picture. I’m just not willing to ignore what the chart is telling us at these levels.
But every parabolic move eventually has to deal with mean reversion — and $ZEC is now reaching the kind of extreme deviation from its cycle mean that has preceded major pullbacks in previous rallies.
That doesn’t mean the top has to be in today.
It means the risk profile has changed dramatically.
At some point, price will need to rotate back toward its acceptance range and reset the excess built during this move.
The irony is that many who thought $ZEC was too expensive at $400 are now calling $1,200 cheap.
That’s exactly when late longs start piling into an already extended move.
Eventually, leverage gets flushed, price returns toward acceptance, and the market resets before the next expansion can begin.
I’m still bullish on the bigger picture. I’m just not willing to ignore what the chart is telling us at these levels.
