Markets Struggling, Dollar Strength and Privacy Still Hot

Well, we just keep going lower, though if there’s any good news to take from the current situation, it’s that crypto isn’t alone in getting pummelled. Though of course, it always feels the pain of a drawdown more than other asset classes.

Today’s forward guidance looks at what exactly is weighing down the markets and what the outlook is over the next few weeks. Spoiler alert: the next Fed interest rate decision is another big one.

We also take another look at Zcash and the privacy narrative more broadly. $ZEC holders have been among the few in crypto to have anything much to celebrate recently and today we’ll explain how. There’s a lot more to this story than meets the eye.

📈 Crypto Market Forecast 📈

When the crypto market falls sharply like it did last week, it’s easy to get lost in nonsensical narratives and short-term timeframes. That’s why it’s more important than ever to step back, zoom out, and ask: why are markets falling, and is this something that could continue? Broadly speaking, there are two reasons why crypto markets move: macro factors, and crypto factors.

Logically, you need a bullish macro backdrop for bullish crypto factors to have an impact on price. In other words, the macro factors are the most important - the first thing to check when the crypto market is crashing. How can we tell when the macro backdrop is bullish or bearish? To look at what other, larger assets are doing, particularly large stock indices like the S&P 500.

As you may have noticed, the S&P 500 fell quite sharply last week as well. Naturally, this suggests that the reason why the crypto market fell last week was something macro related. If it was crypto specific, then only crypto prices would have been affected. Because other, larger assets were affected too, this means that it’s a factor affecting everything - a macro factor.

So, what could this macro factor be? There are two answers, a short-term answer, and a long-term answer. The short term answer is, or rather was, a decrease in the likelihood that the Fed will cut interest rates. This was in response to the stronger than expected unemployment data for September. As the markets had priced in more cuts, the prospect of fewer cuts was bearish.

This ties into the long-term answer, which is a shortage of global liquidity caused in large part by the Fed keeping interest rates so high for so long. This is arguably the primary macro factor that’s been keeping crypto prices pinned down in recent months, even relative to other assets. That’s because risk assets like crypto are the most sensitive to changes in global liquidity.

As such, the reduced likelihood of the Fed cutting means that not as much new liquidity will be created. This means that there won’t be as much money going into the markets. In turn, this means that assets are likely to struggle, with the highest-risk assets like crypto being the most affected. The result is that stocks fall, and crypto falls even harder. But that’s just last week.

Going forward, what happens in the crypto market depends on two factors. The first is whether there will be another uptick in global liquidity, which is code for ‘is the Fed going to ease in some way?’ In case you missed the news, there are strains in the credit markets, both in the Fed’s facilities, as well as private credit. This means that there’s likely to be Fed intervention soon.

At the same time, the Treasury General Account is starting to be drained after being refilled and then constrained as a result of the US government shutdown. This means that we are guaranteed to see an increase in market liquidity coming from fiscal policy, with an apparently high likelihood of an increase in market liquidity coming from monetary policy in coming weeks.

Meanwhile, we’re likely to get a series of crypto factors that could be bullish for the market, the two most important ones being the passing of the CLARITY Act and the SEC introducing an innovation exemption which would temporarily legalize everything on-chain in crypto in the US. It goes without saying that this would be especially bullish for altcoins.

Taken together, this suggests that at the very least, a bounce is likely in the coming weeks. Exactly when this bounce will occur, how big it will be, how long it will last, and whether it will turn into a full-blown recovery remains to be seen. The fact that everyone expects a bounce, and everyone wants to sell into the bounce, could result in a scenario along these lines.

In sum then, even if the crypto bull market is over, a bounce is likely in the coming weeks. It’s worth noting that Bitcoin Dominance has fallen despite the recent drawdown, and that OTHERS Dominance has somehow risen. What this suggests is that when the bounce inevitably comes, altcoins are likely to outperform Bitcoin. Let’s hope so, at any rate.

🥷 Privacy Meta 🥷

It has been exactly one month since we last covered Zcash ($ZEC).

In that time, $ZEC has managed to pull another 3x in price gains – going from roughly $220 on October 19th to a new local high of $732 on November 7th.

What is even more impressive is that these price gains came during a time when the broader crypto market was bleeding profusely – both BTC and the TOTAL market cap have fallen by roughly 20% in the past 30 days.

Imagine that, ZEC holders made money while everyone else was wondering if we were entering a bear market. To understand this gravity-defying price performance, we decided to take a closer look at Zcash this week.

After a thorough dive, we’ve discovered that the recent outperformance of ZEC comes from a combination of four catalysts - institutional adoption, short squeezes, ecosystem updates and onchain growth.

For the first, the credit largely goes to the Winklevoss twins. Not only did they update shielded ZEC withdrawal protocols on their Gemini crypto exchange, they also established Cypherpunk - a digital asset treasury firm dedicated to $ZEC. Both developments are massive.

Notably, Gemini has long been the first and only major crypto exchange to support shielded ZEC withdrawals. However, until recently, the shielded withdrawals on Gemini were only into Sapling, Zcash’s older shielded pool. This presented a problem for users who preferred or required withdrawals into Orchard, Zcash’s latest shielded pool.

For instance, users with Keystone hardware wallets were unable to make shielded withdrawals from Gemini since Keystone only supports Orchard. Another reason some privacy advocates exclusively prefer Orchard is because it was designed to eliminate the Trusted Setup process in the older pools. For context, the Trusted Setup is a security and privacy design that some viewed as inherently flawed. Gemini’s recent update solved these issues by enabling users to make withdrawals to Orchard.

The Winklevoss twins’ second contribution is the establishment of Cypherpunk – a digital asset treasury firm focused on accumulating ZEC. The twins made a $50M investment into Cypherpunk via their Winklevoss Capital investment firm. Since its establishment on Nov 12th, Cypherpunk has accumulated a total of 233,644 ZEC (roughly 1.43% of the circulating supply) for roughly $68M or ~$290 per coin. Cypherpunk plans to continue accumulating ZEC until it owns at least 5% of the total ZEC supply. This roadmap presents a potential steady stream of buy pressure, massively boosting investor sentiment for the long-term performance of ZEC.

The second catalyst impacting ZEC is the liquidation of short positions on perp exchanges like Hyperliquid as it continues ripping upward. Notably, several traders have opened multi-million dollar shorts on ZEC that have been liquidated one after the other. The most notable in recent days includes the liquidation of a massive $72M ZEC short by a Hyperliquid trader – it caused ZEC to pump by 9% on Hyperliquid.

The third catalyst pushing sentiment and speculation up for ZEC is the updated Q4 2025 roadmap for Zcash presented by Zcash developer Electric Coin Company on October 31st. Notably, the comprehensive roadmap promised to fix some of the current issues with shielded transactions on Zashi (as identified by ZachXBT), enable Keystone hardware wallet integration, and enhance cross-chain privacy swaps via NEAR Intents. More recently, we also saw new leadership appointments within the Zcash foundation.

The fourth and final major catalyst has been the steady onchain user growth in ZEC. Notably, shielded supply has grown from ~4M ZEC in early October to 4.82M ZEC at the time of writing. A report by Coinmetrics also reveals that the transaction volume of ZEC has surged 10x in recent weeks. Similarly, the hashrate for the Zcash network has increased by 50%, from 8.9 GH/s to 13 GH/s.

Most importantly of all however, the narrative of Zcash being a private BTC continues to grow. Understandably, this had led some investors to develop a broader interest in privacy coins. For now, most of this interest presents in the form of quick capital rotation (big pumps and big dumps) between different privacy coins. Given that Solana has some of the most speculative investors, it is no surprise that we see a lot of new privacy projects within the Solana ecosystem as well. Some of the more notable examples include projects like MoneroChan, GhostWareOS, and Umbra among others.

That said, in uncertain times, capital preservation must remain an investor’s top priority. If you’re sitting on massive gains from a ZEC position – don’t be shy to take a portion of your profits off the table.

🔥 Hot Deal Of The Week 🔥

Regardless of if you still have exposure to the market or are sitting in stablecoins it is a good idea to have self custody of your crypto assets. If you are looking for an extra layer of security then a cold wallet is what you are after.

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🔮 Video Pipeline 🔮

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* Crypto Buybacks: Which projects are planning them & how they work?

🏆 What's New at CoinBureau.com This Week? 🏆

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📖 Quote of the Week 📖

Your portfolio’s current value is not a reflection of its future potential. If you exit now, the decision is final.

“Success is not final, failure is not fatal: it is the courage to continue that counts.” - Winston Churchill

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.