ZCash (ZEC) has faced a challenging period, declining 3.82% over a recent 24-hour window, largely mirroring Bitcoin's slide to lows around $87,500. While Bitcoin managed a recovery, ZEC struggled to undo its losses, with its performance further impacted by a broader downturn in the privacy coin sector. Monero (XMR) and Dash (DASH) fell 0.89% and 14.5%, respectively, over the past four days, highlighting the sector's underperformance.
Despite the pressure, ZCash has successfully defended the crucial psychological support level of $400. Technical analysis reveals a bullish structure shift was confirmed on December 9th when the price moved past the local high of $409.3. The $410 area, identified as an imbalance zone from late November, has acted as a steady demand area. Indicators like the On-Balance Volume (OBV) have begun to push higher, and the Relative Strength Index (RSI) suggests momentum is turning.
However, the short-term outlook shows bearish momentum on the 1-hour chart, with the OBV indicating heightened selling pressure since December 12th. The $400 support level, while holding, has been tested three times in the past week, potentially weakening it. Analysts suggest a breakdown below $400 is possible given the lower timeframe selling pressure.
The bullish case for ZEC remains underpinned by a strong narrative, notably championed by influential figures like Arthur Hayes. Hayes has linked Zcash's future to growing demand for privacy and its quantum-resistant features. This fundamental optimism is reflected in ZEC's staggering 694% gain over the past 90 days. The recent pullback is viewed by some as a natural cooldown after such a massive rally, with traders taking profits rather than a rejection of the bullish thesis.
Technically, a recent bounce from the $394 level—which aligns with the 0.236 Fibonacci retracement—suggests dip-buying interest. The MACD histogram is back in positive territory, signaling a slowdown in selling pressure. For the bullish trend to resume, analysts point to the need for ZEC to overcome the $425 supply zone. A move above $425, followed by a successful retest, could present a buying opportunity. The next major resistance is seen in the $480-$500 range, with a breakout potentially targeting $570. Conversely, a failure to hold $394 could lead to a further decline toward $370.
Long-term fundamentals are strengthening, with rising engagement in shielded transactions and regulatory discussions in Europe viewing ZEC's opt-in privacy model favorably. However, with only about 25% of the total ZEC supply currently shielded, the immediate demand impact from these developments may be limited. The immediate price action will likely hinge on Bitcoin's market sentiment and capital inflows, as well as ZEC's ability to hold key support levels.
