The price of Zcash (ZEC) has experienced significant volatility, rallying approximately 80% from a low near $300 to briefly trade in the $500–$550 range. This sharp rebound followed a steep decline from highs above $700 earlier in the year. However, technical analysis suggests the rally may be corrective within a larger bearish structure, as price faces a heavy resistance zone between $550 and $600—an area that has rejected price multiple times in the past.
Beneath the surface, on-chain and derivatives data reveal a more complex picture. A newly created wallet withdrew 7,714 ZEC (worth roughly $4.12 million) from the Kraken exchange in a coordinated manner. This significant outflow tightened spot supply on exchanges without triggering an immediate price reaction, potentially setting the stage for delayed upside pressure. Despite this, derivatives markets show heavy short positioning, with data from Binance indicating about 65% of accounts hold short exposure.
The conflict between spot supply dynamics and bearish derivatives positioning raises the risk of a short squeeze. Short liquidations have already reached approximately $1.77 million, significantly outpacing long liquidations of around $182,000, even during modest price advances. Technically, ZEC has defended the $300-$320 support zone and established higher lows, improving its structure. The key levels traders are watching are the $550-$600 resistance zone overhead and the $300 support below. A decisive break and hold above $720 would invalidate the current bearish setup, while a failure to hold $300 could open the path toward the sub-$200 region.
