The price of Zcash has been under continuous pressure over the past two weeks, with the overall structure clearly leaning towards a downward trend. Since mid-January, ZEC has entered a downward adjustment path, which may potentially drop by up to 35% if key levels cannot hold.
At the same time, not all signals are aligned. Some large investors continue to increase their holdings, and short-term momentum indicators show that buying during price declines is not yet exhausted. Whether it stabilizes or declines further now depends on the price's reaction to a few key levels.
The breakout structure indicates a decline of 35%.
The daily chart of Zcash shows that the breakdown from the bear-flag pattern began on January 16, when prices fell below the area of 414 USD. This movement indicates a loss of the previous accumulation phase and confirms a continuing bearish trend structure.
Referring to the height of the previous price range, the bear-flag axis, and the forecast for breaking out of the range, this structure targets a price near 266 USD, indicating a decrease of about 35% from the breakout point.
Want more insights about this type of token? Subscribe to the daily crypto newsletter written by editor Harsh Notariya here.
This is no longer just a theoretical risk. The price of ZEC has moved in line with these predictions, showing that sellers still control the broader trend.
However, the structure alone cannot explain why prices have not declined more rapidly. Therefore, we must consider momentum and capital flow together.
Large holders are starting to buy, but retail investors still lack confidence.
Although the structure is bearish, Zcash has experienced a short-term rebound of about 9% from the low on January 25, which aligns with changes in the Chaikin Money Flow or CMF.
CMF is a tool that measures whether large capital is flowing in and out of an asset, based on price and volume. When CMF rises, it signals increasing buying demand, but if it is below zero, it indicates net capital outflow.
Recently, ZEC's CMF index broke through the downward trend line that had pressured prices for several weeks. This change has helped stimulate a short-term rebound. However, the CMF index remains below the zero line, indicating that buying pressure has emerged but is not strong enough to reverse the primary trend.
Previously, when the CMF broke above the zero line, it led to an increase of about 31%. Therefore, to cancel the bearish trend, it is crucial for the CMF to return to stay above the zero line again.
Data from holders on the network also provides additional details. In the past 24 hours, whale and mega-whale groups have increased their holdings by about 5.96% and 1.39%, respectively. This accumulation is likely the reason the CMF is showing an improving trend, as large holders seem ready to buy during price dips.
The behavior of retail investors varies greatly. Spot flow data indicates that after a short period of outflow, there is a net inflow again during the rebound. In other words, while the price rebounded nearly 9% from yesterday's low, selling pressure increased to nearly 9 million USD. This suggests that many participants, possibly retail investors, are using the bounce to reduce risk rather than to buy more.
This divergence explains various signals, where whale groups are helping to support ZEC prices at certain times, while retail investors remain cautious and take profits during price rebounds.
MFI indicates that buying during price drops still exists, but the price structure of Zcash dictates the direction.
The Money Flow Index or MFI helps to clarify this conflict, as MFI is a measure of buying and selling pressure using both price and trading volume.
Between January 14 and January 25, the price of ZEC showed a downward trend, but the MFI increased. This bullish divergence indicates that buying during the price drop still exists, even as prices decrease, and helps explain why ZEC has not undergone a rapid correction despite a downward price structure. Looking at past graphs and indicators, the buying during price drops likely comes from whale groups.
However, buying pressure from purchases during price drops alone cannot overcome the primary price structure forever, and currently, price levels are more significant than various indicators.
On the downside, the area around 326 USD is critically important because this level corresponds with the key Fibonacci retracement and has previously acted as a temporary support. If the price clearly breaks below 326 USD, it could accelerate the price drop towards the important target of 266 USD, and if selling pressure increases, we might eventually see the level of 250 USD.
From a bullish perspective, the price of Zcash needs to remain above 402 USD.
Because this level has previously been an old support and a short-term resistance, if it can break above, the level of 449 USD will become a significant zone. If the price rises above 449 USD, it will invalidate most of the bearish structure and signal that the bearish trend may not be as significant as before.
