Journalist
Published:
The privacy-focused cryptocurrency Zcash (ZEC) has seen one of the steepest declines in the broader market, losing double-digit value in recent sessions.
Its continued weakness has raised pressing questions among market participants: can ZEC stabilize at current levels, or is a deeper decline ahead?
Market structure
Since the start of the year, ZEC has plunged about 62%, with little sign of a sustained recovery or significant rebound that would suggest a major trend reversal.
The asset is now trading in a tight consolidation range between $225 and $205 on the chart. This area has already served as support twice, making it a decisive technical space.
Source: TradingView
This level will likely determine the next directional move. If buyers defend the zone as they have done before, the ZEC could stage another rebound. However, a break below this support would expose the asset to further declines, potentially accelerating losses beyond previous declines.
A confirmed breakout could pave the way for the next visible support near $120, which would imply an additional downside risk of almost 30% from current levels.
Such a move would significantly weaken the structure as a whole and place long-term holders under renewed pressure.
Indicators show continued weakness
Technical indicators reinforce the bearish outlook. Capital continues to leave the market, as reflected in the Money Flow Index (MFI).
The MFI measures capital inflows and outflows on a scale of 0 to 100. Readings between 50 and 80 generally indicate bullish conditions, while levels between 20 and 50 suggest weakness. Values below 20 generally signal oversold territory.
Source: TradingView
At the time of analysis, ZEC’s IMF fell to 18. Although this level often indicates oversold conditions, in which selling pressure may soon ease, it does not guarantee an immediate reversal. For now, investors remain cautious as the market shows no clear signs of accumulation.
Likewise, the Relative Strength Index (RSI), a momentum-based indicator, has fallen below the neutral 50 level and continues to decline. This drop suggests a decrease in buying strength and confirms that bearish momentum still dominates the chart.
Where is the ZEC going?
The liquidation heat map offers insight into potential near-term direction. Liquidity clusters are above the current price, which could lead to higher prices as markets often gravitate towards areas where liquidity is concentrated.
This setup supports the possibility of a short-term rebound. However, lower liquidity clusters also exist around $197. The price could drop slightly to sweep away this liquidity before attempting a stronger recovery towards higher clusters.
Source: CoinGlass
Even though the heat map suggests room for upward movement, the overall sentiment and momentum remains fragile. Until buyers return to key levels and indicators show sustained improvement, ZEC remains exposed to further downward pressure.
Final Summary
- The bulls are retreating at a time when prices are clinging to a critical support level.
- The liquidation heatmap still indicates a possible rebound, with liquidity clusters positioned above the current price.
