Zcash (ZEC) is navigating a critical technical juncture, with its price threatening a 35% decline while on-chain data reveals significant accumulation by large holders. The cryptocurrency has been under steady bearish pressure since mid-January, with a breakdown structure pointing toward a potential drop to the $266 level from recent prices around $414.
The bear-flag breakdown began on January 16 when ZEC fell below the $414 zone, confirming a bearish continuation pattern. Technical analysis suggests this structure projects a downside target near $266, implying a roughly 35% decline. The price has already moved in line with this projection, indicating sellers control the broader trend.
However, conflicting signals emerge from market participants. Despite the bearish structure, ZEC saw a short-term rebound of approximately 9% from the January 25 low. This bounce aligns with a breakout in the Chaikin Money Flow (CMF) indicator above a descending trendline, suggesting increasing buying pressure, though CMF remains below the zero line indicating net outflows persist.
On-chain data reveals a stark divergence between whale and retail behavior. Over a 24-hour period, whale and mega-whale addresses increased their ZEC holdings by approximately 5.96% and 1.39% respectively. According to Nansen, the top 100 ZEC wallet addresses have increased their holdings by 8.85%, adding 42,623 tokens, with other whale cohorts following a similar accumulation trend of over 5.06%. This suggests major players are executing a 'buy-the-dip' strategy.
Retail sentiment appears more cautious. Spot flow data shows that during the recent 9% bounce from lows, selling pressure increased to nearly $9 million, indicating many participants used the rally to reduce exposure rather than add to positions. Trading volume has jumped 43% to $495.35 million, reflecting heightened activity.
Derivatives positioning adds to the bullish case. Coinglass data shows heavy long positioning around the $325.1 level ($7.37 million) and short clustering near $365.1 ($5.45 million), suggesting traders lean bullish at current levels. The Money Flow Index (MFI) has trended higher from January 14-25 while price declined, showing a bullish divergence and indicating dip buying has been present.
Price action remains the ultimate arbiter. ZEC is currently trading near $351, up about 7% on the day, and is testing the critical $320 support level—a zone defended since October 2025 and marking its fourth retest. Historically, previous visits to this level preceded rallies exceeding 60% within one month. For the bearish structure to be invalidated, ZEC must reclaim $402 (former support turned resistance) and ultimately move above $449.
While the price remains below the 50-day Exponential Moving Average (EMA), indicating a prevailing downtrend, some analysts remain optimistic. Prominent trader Whale.Guru has suggested ZEC could eventually surge toward $2,000, though such projections remain highly speculative and dependent on broader market conditions.
