Zcash Technicals Show Exhaustion as Grayscale Founder Hints at Short Squeeze

Zcash (ZEC), the privacy-focused cryptocurrency, is navigating a critical technical juncture following a steep decline from its November highs, with chart analysis suggesting potential for a near-term recovery. The token has lost more than a quarter of its value from its recent rally, with a 38% drop over the past seven days, trading around $331 at press time. This decline occurred despite a broader altcoin market rally, placing ZEC among the week's weakest performers.

Technical indicators are pointing to possible seller exhaustion. The price action has formed a tightening consolidation range, with red candles shortening and trading volume thinning on the 4-hour chart—a classic sign of waning selling pressure. ZEC has reclaimed the $340 zone and is testing key support levels between $330 and $300, areas that have historically triggered strong market reactions. The token is also hovering near the 0.382 Fibonacci retracement level around $302, drawn from its yearly highs.

Market sentiment received a notable boost from Grayscale founder and longtime Zcash bull, Barry Silbert. In response to market chatter about ZEC's price, Silbert tweeted he was "busy making popcorn for the massive short squeeze," hinting at a potential rapid price surge fueled by short sellers being forced to cover their positions. This comment has intensified speculation around ZEC's next major move.

Analysts outline two primary short-term scenarios. A bullish outcome would require ZEC to hold above $330 and break through the $385 resistance, potentially targeting a move toward $400 and eventually the $525-$545 range. Conversely, a break below the $330-$345 support band could lead to a retest of the psychologically important $300 level, with further failure opening the door to declines toward $270.