Zcash Faces a 97% Buying Pressure Collapse: What’s Next?
The cryptocurrency market has witnessed explosive growth in recent years, but not every digital asset is riding the wave. Zcash (ZEC), a privacy-focused cryptocurrency, has found itself at a critical juncture as its price drops precipitously amid broader market recovery.
Once a beacon of strength due to its negative correlation with Bitcoin (BTC), Zcash’s biggest asset has now become its greatest weakness. While Bitcoin and major cryptocurrencies like Ethereum have bounced back recently, Zcash has plummeted by over 40% in the past week, raising concerns about its future.
Why Is Zcash Falling?
For most of this year, Zcash displayed a negative correlation with Bitcoin, meaning it often moved in the opposite direction. This was advantageous when Bitcoin struggled, allowing Zcash to rally over 650% during late October and November. However, with Bitcoin now surging, Zcash is losing favor. The shift has caused massive downward pressure on the asset.
The technical indicators are also concerning. Zcash’s 20-day exponential moving average (EMA) is approaching its 50-day EMA. If it crosses below, it could signal further losses. This crossover, noticed in many financial markets, often marks weakening momentum and foreshadows additional declines. The ZEC price sits precariously at a crossroads.
Buying Pressure Drops by 97%, But There’s Hope
On December 1 and December 2, exchange outflows — a metric tracking buying interest — collapsed drastically, from $61.06 million to $1.74 million, representing a 97% decline. This stark drop indicates a major slowdown in long-term investor interest, signaling traders may be losing faith in Zcash as a reliable store of value.
However, not all is lost. The Wyckoff volume analysis shows that selling pressure has also started to reduce, marking yellow bars indicating sellers losing control. A similar trend occurred in late October, preceding a 230% rally. If the selling pressure continues to ease, Zcash could stabilize, but it would require significant buying momentum to turn the tide.
Critical Price Levels to Watch
Zcash faces stiff resistance and support levels that could either enforce stability or catalyze further declines:
- Support Levels: The first support stands at $299. Should it fail, ZEC risks slipping to $210 before potentially plummeting to $124, the levels seen during early bear market resets.
- Resistance Levels: On the flip side, recovery depends on reclaiming the $426 mark. If reached, it would signal a 34% bounce and lay the groundwork for a potential rally toward $736, a level unmet since early November.
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Final Thoughts
Zcash is at a turning point. With historical trends now counteracting its price, a sharp drop in buying pressure, and weak technical signals, ZEC faces a tough road ahead. However, easing sell pressure and reclaiming $426 could pave the way for recovery. Whether you’re a long-time holder or tracking potential investment opportunities, staying informed and proactive is key.
