The price of Zcash has faced renewed selling pressure after a sharp 16% drop in the last 24 hours, pulling the altcoin back from its attempt to rise above $400.
This rejection has delayed ZEC's attempts to regain higher levels, and an extended wait may bring additional challenges for traders if market sentiment weakens again.
Zcash is decoupling from Bitcoin
The correlation between Zcash and Bitcoin has weakened in recent days, falling back below the zero line. A negative correlation means that ZEC no longer moves in the same direction as BTC's price.
While this may initially seem neutral, it brings with it an unusual risk dynamic. If the price of Bitcoin rises, Zcash may not benefit from broader market optimism.
On the contrary, if the price of Bitcoin falls sharply, ZEC may rise unpredictably, but there is no guarantee of sustained strength.
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The liquidation map adds an extra layer of caution for ZEC holders at the moment. Long traders are at increased liquidation risk, with nearly 17,49 million dollars in long contracts exposed if ZEC falls to 300 dollars or below.
These potential liquidations represent significant pressure on bullish sentiment.
If prices approach this threshold, chain-reaction liquidations could accelerate the downward movement. Such events often lead traders to close long positions and prevent the opening of new long positions, supporting the bear market spiral.
The trading price of ZEC is 339 dollars and hovers around the 344 dollar support level following a steep decline from intraday peaks. A sharp sell-off and weakening market structure suggest that further declines may be expected in the near future.
If the downward trend continues, ZEC could drop towards the critical 300 dollar support. Losing this level would likely trigger a liquidation accumulation of 17,49 million dollars. This could potentially push the price down to 260 dollars as forced selling increases.
However, if sentiment changes and buyers return, ZEC could stabilize at 344 dollars and attempt to recover towards 403 dollars. A successful breakthrough above this level would negate the bear market theory and restore confidence among long position traders.
