Zcash has seen a short-term rebound, but the overall picture remains uncertain. After hitting a local low on January 10, Zcash’s price has rebounded about 16%. This rally came despite the token continuing to fall over 20% this week and falling again in the past 24 hours. Beneath the surface, on-chain data shows active whale accumulation.
At the same time, trend signals, currency flows and smart money actions still indicate risks. This creates an obvious contradiction. Is this rebound the beginning of a recovery or just a pause before putting another foot down?
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Bullish divergence and whale accumulation explain the rebound
The rebound didn’t come out of nowhere. From December 6th to January 10th, Zcash recorded a hidden bullish RSI divergence. Zcash price formed an even higher low, while the Relative Strength Index (RSI), a momentum indicator that measures buying and selling strength, formed an even lower low. This pattern often indicates that selling pressure is waning before price reacts.
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The whale’s behavior matched that signal. Over the past seven days, Zcash’s largest holders have actively intervened. Mega Whale Wallet increased its holdings by 39.07%, bringing the total balance to 45,103 ZEC.
The smaller Whale Wallet also joined in, increasing 17.63% to 10,405 ZEC. Therefore, total whale purchases in the past seven days are $5.7 million.
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Prominent wallets rose nearly 20% over the same period. This steady accumulation explains why the RSI divergence pushed the price upwards and why Zcash was able to bounce back from the January lows on January 10th.
EMA risk increases as spot outflow fades
But that rebound is encountering structural resistance. Zcash price is currently trading below the major exponential moving average (EMA). EMAs give more weight to recent prices and help identify trend direction. The 20-day EMA is drifting towards a bearish crossover below the 50-day EMA, but this setup often caps the rebound and restarts the downtrend. These EMA levels also act as overhead resistance.
Spot exchange flows reinforce this risk. Zcash is still showing net outflows from exchanges, meaning coins are leaving exchanges rather than entering for sale, but the strength has sharply declined. On January 7, net outflows reached nearly $35.6 million.
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It has since declined to about $10.7 million, a decrease of about $25 million, or nearly 70%. This suggests that while whale stocks continue to accumulate, retail selling and hesitancy may be creeping back in as sentiment remains fragile.
However, this setting is not new. A similar EMA crossover risk emerged in late December. At that time, sustained whale buying pushed the 20-day EMA away from the 50-day EMA, rather than below it. This divergence caused Zcash to rise by 38.36%. The market is now focused on whether the current whale build-up can once again overwhelm declining retail demand and prevent the bearish crossover from completing.
Smart money still warns, $300 Zcash price risk exists
The final signal comes from the Smart Money Index (SMI). This indicator tracks how informed traders are positioning themselves for retail behavior. A break below the signal line often indicates caution and downside risk. The Zcash Smart Money Index remains well below that line.
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The last time ZEC prices fell this sharply was from late November to early December, when ZEC prices fell by more than 50%. The SMI line appears to be flat for now, with one nuance worth noting.
On the derivatives side, net longs have started to increase over the past 24 hours due to smart money positioning. This suggests that some traders (on the derivatives side) are betting on a rebound. But that bet comes with conditions.
To recover, Zcash needs to regain $408 and then move above $459 and $483. Until that happens, downside risk persists due to the EMA structure and weak outflows. A clean break below $361 will open the path to $300 again.
The Zcash rally is real and the whale buying explains it. However, structure remains dominant. Whale accumulation and improved smart money positioning alone may not be enough to negate the $300 risk until the trend signal reverses.
