Zcash price maintains a clear upward trend, raising expectations for an imminent breakout. ZEC continues to hit highs, suggesting surface strength.
However, a closer analysis of investor behavior and derivatives positioning reveals weakening demand, raising questions about the sustainability of the current uptrend.
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Zcash holders express skepticism
Chaikin Money Flow shows caution on Zcash price. On the 2-day chart, CMF is forming a lower high, while ZEC price is recording an even higher high. This bearish divergence indicates that capital inflows are decreasing despite rising prices.
Such divergence often reflects distributions that occur below the surface. Investors may be selling on strength rather than accumulating. When buying pressure subsides during an uptrend, prices are more likely to reverse, especially if broad sentiment does not improve.
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Macro indicators support the bearish outlook. Zcash funding rates are significantly negative across major derivatives platforms. This imbalance shows that short contracts significantly outperform long positions, reflecting strong downside expectations among traders.
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A negative funding rate suggests that traders are paying a premium to maintain short exposure. This positioning indicates an expectation of a short-term price decline. Continuation of negative interest rates often coincides with a decline in spot demand, reinforcing broad bearish sentiment for the asset.
ZEC Price May Witness Correction
ZEC price is currently forming an ascending wedge, and this pattern could precede a sharp move. The cryptocurrency is trading around $522 at the time of writing and remains below the $528 resistance. The structure suggests a breakout, but there is no confirmation.
Despite the wedge, falling CMFs and negative funding rates, bankruptcy risk is rising. If the selling pressure accelerates, ZEC could fall towards the support at $448. Below this level, the decline is likely to extend to $403, which would ensure a bearish reversal.
A bullish scenario remains a possibility if the macro environment improves. If the buying momentum strengthens, ZEC could break above $528. A confirmed breakout could push the price towards $607, with $702 emerging as an extension target and completely invalidating the bearish theory.
