Is this just a pause before expansion — or the start of exhaustion?
Zcash (ZEC) has corrected 6.68% over the past week, cooling short-term momentum. However, the broader bullish structure has not been invalidated. If Bitcoin (BTC) manages to break and sustain above the local supply zone near $70,000, short-term optimism could spill over into the altcoin market — potentially reigniting upside pressure for privacy-focused assets like ZEC.
Yet beneath the surface, liquidity conditions and derivatives data are flashing mixed signals.
$52 Million in Perpetual Outflows — Warning Sign or Reset?
According to data referenced by Coin Photon, ZEC has experienced approximately $52 million in capital outflows from perpetual futures markets. At the same time, elevated liquidation activity over the past month has reinforced ZEC’s high-volatility profile.
Rising liquidations often signal unstable leverage conditions. While this can reflect risk-off sentiment, it can also create a “clean slate” scenario — removing overleveraged positions before a potential impulsive move.
The key question:
Is this distribution — or positioning for expansion?
Long-Term Fundamentals: Privacy Narrative Still Intact
From a structural standpoint, Zcash’s long-term thesis remains supported by growth in shielded supply and expanding transaction activity. These metrics reinforce the project’s core privacy value proposition — a unique positioning in the digital asset ecosystem.
Price-wise, the strong reaction from the long-term support zone at $187 was technically significant. That level triggered a swift rally toward $320 before retracement, confirming that demand remains active at macro support.
The market has not rejected higher prices — it has merely paused.
Daily Timeframe: Momentum Weak, Structure Intact
On the daily chart:
RSI hovers around 43, reflecting weakening momentum and slight bearish bias.
OBV has failed to form new highs throughout February and has drifted toward local lows, indicating subdued buying pressure.
From a pure indicator perspective, traders are justified in maintaining caution.
However, technical indicators are lagging by nature.
Price action is currently telling a more nuanced story.
$250–$251 Zone: The Battlefield That Changed Structure
The imbalance zone near $250 — along with prior resistance at $251 — has been tested and defended successfully over the past two sessions.
Notably, this same region acted as a local supply barrier just weeks ago.
Now it has flipped into support.
That structural shift is important.
The previous rally from $187 to $320 demonstrated ZEC’s ability to expand rapidly when momentum builds. If buyers maintain control above $251, the door remains open for a renewed push toward $320 — and potentially beyond.
H4 Structure: Short-Term Bullish Rotation
On the H4 timeframe:
Market structure has tilted bullish after reclaiming $251.
Swing structure remains broadly bearish, but short-term momentum favors deeper retracement.
This creates a classic counter-trend recovery setup.
Fibonacci retracement levels at 61.8% and 78.6% are widely viewed as high-probability reaction zones. If price continues holding above $250–$260, upside levels at:
$320
$357
remain technically viable targets.
However, liquidity remains thin — and low volume environments can exaggerate moves in both directions.
Low liquidity doesn’t kill breakouts.
It can amplify them.
The $357 Question: Breakout or Rejection?
If ZEC reaches $357:
A clean breakout above that level would shift higher-timeframe structure.
A sharp rejection there could reinforce the broader bearish trend.
This makes $357 a potential decision point for medium-term positioning.
Until then, the market remains in a transitional phase.
Risk Factors to Watch
Sustained weakness in Bitcoin below $70K
Continued OBV deterioration
Failure to defend $250 support
Declining derivatives participation
On the flip side, renewed spot accumulation combined with rising volume would strengthen the bullish case.
Market at a Crossroads
ZEC is not collapsing.
It is compressing.
Compression often precedes expansion.
The debate now is simple:
Is this low-liquidity pause setting up a breakout toward $357 — or signaling fading momentum before deeper downside?
Drop your view below 👇
Break above $320 first — or revisit $187?
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