Zcash (ZEC), the privacy-focused cryptocurrency, is showing signs of a potential breakout rally after weeks of sideways trading. The altcoin, which shares Bitcoin's 21 million coin supply limit and proof-of-work mining system, is currently trading near $396 with a market capitalization of $6.8 billion.
Technical analysis reveals a bullish divergence forming on the charts. While the ZEC price has been posting lower lows, the Chaikin Money Flow (CMF) indicator has created a lower high, signaling hidden accumulation by investors. This divergence suggests that capital inflows are not yet fully reflected in the price action. The CMF has recently climbed above the zero line, confirming a shift toward net capital inflows into ZEC. Historically, such technical setups often precede upward price movements.
On-chain data reinforces this bullish sentiment, showing increased activity from large holders. Addresses holding more than $1 million worth of ZEC have increased their holdings by approximately 6.7% over the past week, according to data from Nansen. This steady, consistent accumulation by whale investors signals growing confidence and often provides a stable foundation for price appreciation.
Zcash price is currently moving within a triangle pattern on the charts, suggesting compression before a larger directional move. A decisive break above the $450 resistance level would confirm a bullish breakout, potentially lifting ZEC toward $504 and then $540, allowing it to recover much of its recent decline. However, risks remain; if selling pressure emerges and the price breaks down from the triangle pattern, ZEC could slide toward the $340 support level.
The cryptocurrency's core value proposition remains its privacy technology, which uses zk-SNARKs cryptography to hide transaction details like sender, receiver, and amount from public view. Approximately 20% of each mined Zcash block is allocated to development funds, supporting ongoing upgrades and community projects.
