Why is the crypto market crashing? Stronger-than-expected U.S. inflation data has increased expectations of a Federal Reserve rate hike, sending Zcash (ZEC) below $1,000. The privacy-focused cryptocurrency has recorded the largest losses among the 20 biggest coins this week.
The crypto market’s decline continued on Wednesday, November 11, following Tuesday’s unexpectedly high inflation reading. Most major digital assets remained under pressure as investors reassessed the Federal Reserve’s monetary policy outlook.
Bitcoin (BTC) slipped beneath $73,000 on Tuesday, hitting a low of $72,727 on Binance, before recovering to approximately $73,800. Ether (ETH) briefly touched $2,006, while XRP and Solana (SOL) registered declines of 2% to 3% over the past 24 hours. The Crypto Fear & Greed Index, which tracks market sentiment on a 0-to-100 scale, also dropped to 29, signaling increased investor anxiety.
Tuesday’s inflation figures significantly altered expectations for the Fed’s next policy decision. Treasury yields surged, and the likelihood of a more substantial December rate increase nearly tripled within two hours of the data release.
Zcash has experienced a much sharper sell-off than the broader market. Introduced in 2016, ZEC is a privacy-oriented cryptocurrency that enables users to hide transaction information, including the sender, recipient and payment amount. Its price dropped below $1,000 on Wednesday for the first time since September 5. At around $966, ZEC is down 15.4% over the past 24 hours and 24.8% over the last seven days.
Despite the recent downturn, Zcash remains one of the strongest-performing assets of 2026. The token advanced from roughly $526 on January 1 to a closing high of $1,653 on September 26. An analysis of the 20 largest cryptocurrencies on Binance shows ZEC has recorded the most significant daily and weekly declines, while still maintaining an 89% year-to-date gain.
Why Is Crypto Crashing? October Inflation Data Fuels Fed Rate Hike Concerns
The latest inflation report came in above market expectations. October’s Consumer Price Index (CPI) rose 0.4%, exceeding the projected 0.3% increase. Core CPI, which excludes volatile food and energy components, climbed 0.3%, compared with economists’ forecast of 0.2%.
The figures exceeded the inflation threshold previously discussed by Federal Reserve Governor Christopher Waller. In a speech delivered shortly before the CPI release, Waller indicated that core inflation near 0.3% could make a 50-basis-point rate hike in December a possibility worth evaluating.
Investors quickly adjusted their expectations. Polymarket data showed the probability of a December rate increase of 50 basis points or more rising from 4.4% before the report to 12.8% within two hours. The probability has since declined to 9.4%, while the odds of a standard 25-basis-point increase are currently at 85.5%.
Higher interest rates typically weigh on cryptocurrencies by making traditional investments such as cash and government bonds more appealing. As yields rise, investors may shift capital away from riskier assets. On Tuesday, the 10-year U.S. Treasury yield climbed from 4.86% to 4.98%.
Two additional developments contributed to the market weakness:
Nvidia shares decline: The chipmaker’s stock fell 5.5% to $168.89 on Tuesday, reaching its lowest closing level since March 30. A Republican senator also called for CEO Jensen Huang to resign over his affair. Crypto markets often react to movements in major AI and technology stocks, adding another source of selling pressure.
Bitcoin ETF withdrawals: U.S. spot Bitcoin ETFs recorded net outflows totaling $969 million over the previous five trading sessions. CryptoQuant analyst Axel Adler Jr. documented the withdrawals in a report referenced by Lookonchain.
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Why Is Zcash Losing More Than Other Cryptocurrencies?
ZEC’s steep decline reflects its substantial gains earlier this year. Comparing the performance of 20 major Binance-listed cryptocurrencies over the past seven days and since January 1 reveals that Zcash has experienced the largest correction.
- Zcash (ZEC): The token has declined 24.8% over the past week, making it the worst performer in the group. However, it remains up 89% in 2026.
- Other major cryptocurrencies: NEAR and Tron (TRX) are the only other assets in the group that remain positive year-to-date. Bitcoin has dropped 6.1% over the past week and 15.9% since the start of the year.
When market sentiment deteriorates, investors often take profits from assets that have delivered substantial returns. Zcash has dropped 41% from its September 26 closing peak of $1,653, reflecting a significant reversal from its earlier rally.
Leveraged trading has also contributed to the accelerated decline. On Hyperliquid, ZEC fell from $1,199.20 to $965.79 in less than 24 hours. Lookonchain identified 32 traders holding leveraged bullish positions worth more than $1 million each. Of those, 27 are currently underwater, with combined unrealized losses estimated at $23.7 million.
Nevertheless, historical data suggests that sharp ZEC sell-offs do not always lead to prolonged declines. Since January 2025, the cryptocurrency has recorded 14 daily losses of at least 12% on Binance. In eight of those cases, its price was higher seven days later, with a median gain of 6.5%.
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ZEC Price Analysis: Will $933 Support Prevent Further Declines?
Zcash is currently trading near $966 after reaching an intraday low of $961.07 on Wednesday, its weakest level since September 4.
On the daily timeframe, ZEC has fallen below its 50-day exponential moving average (EMA), which gives greater importance to recent price movements. The indicator currently stands at $1,200.68. However, the token continues to trade above its 200-day EMA at $872.23.
Key resistance levels:
- $1,050, which aligns with Wednesday’s intraday high.
- $1,191.76, a recent swing high positioned near the 50-day EMA.
Important support levels:
- $933.12, the September 4 price low.
- Around $895, where two major ZEC bullish positions tracked by Lookonchain on Hyperliquid face liquidation near $894 and $895.
- $872.23, the 200-day EMA, which could act as a deeper support zone.
Bitcoin traders are also closely watching Tuesday’s low of $72,727. A decisive move below this level could expose BTC to further downside toward $68,902, the low recorded on August 20.
The ongoing crypto market crash is primarily linked to stronger inflation data, rising expectations of a more aggressive Federal Reserve rate hike and mounting losses among leveraged traders. Zcash is facing the heaviest selling pressure after its significant rally earlier this year. A daily close above $1,050 could offer an initial indication that the bearish momentum is starting to fade.
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