The price of Zcash is still under heavy pressure as bearish momentum continues to strengthen across the market. After losing nearly 35% since the end of January, Zcash (ZEC) is now further trapped in a downward channel that has been pressuring the price for the past few months.
Weak trading volume, fading whale interest, and declining derivative activity all reinforce the downward trend. With various indicators showing warning signals, the charts now indicate that Zcash may be entering a new breakdown phase.
Falling Channel and OBV Breakdown Indicate Ongoing Selling Pressure
Zcash has clearly been moving within a downward channel since November, evident from the consistent lower highs and lower lows.
After briefly breaking above US$740, ZEC entered this downward range and has experienced one major decline of over 56% within that channel, also becoming a breakdown target. Each rebound is getting weaker, indicating that buyers are unable to reverse momentum.
This weakening structure is confirmed by the On-Balance Volume (OBV), an indicator that tracks buying and selling pressure by adding volume on up days and subtracting it on down days. Rising OBV indicates accumulation, while falling OBV signifies distribution.
From early November to the end of January, Zcash's OBV formed an upward trend line. This indicates that some Zcash buyers are still trying to accumulate, even as prices move within a downward channel.
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That support ultimately failed on January 29. Since this breakdown, Zcash has dropped nearly 36%. This confirms the OBV signal and shows that the loss of support volume directly impacts price declines.
On-chain behavior also reinforces this trend. Over the past seven days, whale holdings have decreased by about 36%, and the number of large wallets is approaching around 8,000. This means that large holders are reducing exposure, not accumulating.
At the same time, exchange balances surged nearly 160%. An increase in supply on exchanges usually indicates more tokens ready to be sold, thereby adding selling pressure in the near term.
When combined, the downward channel, OBV breakdown, whale reduction, and inflows to exchanges all indicate that distribution is still ongoing. Retail participation is weakening, long-term holders are reducing their holdings, and supply is moving to exchanges for sale. This combination explains why ZEC is still struggling to maintain support.
Derivative Activity Weakens as Remaining Long Positions Add Risk
As spot participation continues to decline, the next question is whether derivatives can push prices up, as has happened in previous short squeezes.
So far, the data shows very limited support.
Zcash's Open Interest once peaked near US$1.13 billion in December. It has now dropped to around US$395 million, a decline of nearly 65%. This shows that speculative interest has sharply decreased, with many traders closing positions and choosing to wait on the sidelines.
When open interest drops this much, it indicates decreasing market confidence. There is less leverage that can drive a significant rally, and fewer traders are willing to hold the key levels.
At the same time, the funding rate has been declining since October but remains slightly positive. A positive funding rate means long positions still dominate, even though overall participation is shrinking. Simply put, active traders are becoming fewer, but most of those who remain are still speculating that prices will rise.
This condition creates a vulnerable situation. If prices drop further, remaining long positions become susceptible to liquidation. When liquidation occurs during periods of low liquidity, prices can drop sharply and quickly.
So, even though derivatives no longer have enough 'fuel' to drive a major rally, the presence of open long positions still increases the risk of a breakdown. Leverage now actually increases the chances of major sell-offs rather than supporting prices.
Key Price Levels of Zcash Indicate Why the US$100 Zone Remains a Focus
The price of Zcash remains trapped within a descending channel, with the lower trend line continuously pressing the price down. The first major support zone is at US$230.
If daily closures consistently occur below US$230, the price could head towards the next support around US$212, but that won't happen without triggering a breakdown from the trend line.
If US$212 fails to hold, the channel projection and Fibonacci extension both point towards the US$103 area. This zone indicates a potential full decline according to the current structure.
On the upside, recovery remains difficult. ZEC must first reclaim the US$286 level to gain short-term stability. Movement above US$389 is needed to improve the medium-term structure. A rally towards US$557 also requires a significant increase in volume, whale accumulation, and derivative participation, making it less likely to occur under current conditions.
As long as Zcash remains below US$230 and fails to hold at US$212, the risk of a decline will dominate. Without new participation and capital inflows, the chart still favors prices moving toward the US$100 zone.