Zcash's price has cooled off after a long months-long rally. Although the token has still increased by over 650% in the past 3 months, the recent trend has become more cautious. Over the past 7 days, ZEC has dropped about 11% and lost nearly 43% of its value compared to last month.
This adjustment raises an easy question: Is this just a breather before a surge, or is Zcash's rally weakening? Data on leverage, on-chain signals, and price levels suggest the answer hinges on one key factor: Will Zcash reclaim the $404 mark?
Is the cautious accumulation signal returning?
Momentum indicators are sending mixed signals but are all important.
The Chaikin Money Flow indicator, which shows the flow of capital into or out of the market, has shown a slight bullish divergence from December 11 to December 17. During that period, Zcash's price made lower highs, while the CMF made slightly higher highs. This often suggests that buying pressure is gradually returning, although it has not yet clearly manifested in price.
However, the CMF is still below the 0 line. This is significant because the net capital flow still shows negative signs. Buyers have participated, but they remain very cautious instead of buying aggressively.
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The On-Balance Volume (OBV) indicator tells a similar cautious story. OBV determines whether trading volume confirms price trends or not. For Zcash, OBV moves in the same direction as the price and has not broken above the downtrend line. There are no bullish divergence signals here.
In summary, some investors have started to buy due to signals from the CMF, however, the trend has not yet clearly manifested in the market. This still seems like an early preparatory step rather than a strong reversal signal for Zcash's trend.
Leverage data shows the timing differences among traders.
Leverage position data helps explain why the current trend is occurring slowly.
Observe the liquidation map in the last 7 days, the short position is dominant. The total value of short orders is around 44 million USD, while long orders are only around 14 million USD. This indicates that short-term traders are still waiting for prices to continue to decline.
However, in the 30-day time frame, both long and short sides have approximately equal values, around 38 million USD. This ratio indicates that long-term investors have not completely shifted towards a downtrend. Nearly half of derivative traders expect Zcash's price to rise in the near future.
This development aligns fairly well with signals from technical indicators. Short-term downward pressure remains, but the trend waiting for a long-term price increase is gradually forming. Therefore, the current rise of Zcash is only delayed, not necessarily over.
The price levels of Zcash determine the next trend.
The current price is the factor linking all aspects together.
The most important support zone right now is 301 USD if the downtrend is dominant. This price level has been tested multiple times and serves as the bottom of the current price structure. As long as Zcash holds above 301 USD, the major upward trend remains intact.
The short-term issue lies at the 404 USD level. Zcash has not been able to surpass this price area and is still trading below it. This currently is an important control threshold.
If Zcash closes the day above 404 USD, it will be a sign that cautious investors are starting to feel more confident. At that point, the next major challenge is the 520 USD area, which has restrained the upward trend since late November.
If the 404 USD mark has not been conquered, the risk of a price decline remains. If the 301 USD threshold is lost, the price could fall deeper, although the long-term trend has not yet been broken.
At this moment, data shows that the market is only delaying, not completely 'losing'. Zcash still needs a clear confirmation, and that will only appear when the price regains the 404 USD mark.
