Zcash Price Drops 8% as Bearish Signals Firm Across the Chart

Source: CryptoNewsNet Original Title: Zcash Price Drops 8% as Bearish Signals Firm Across the Chart Original Link:

• ZCash (ZEC) trades below major trend averages as sellers reinforce a five-day decline
• OI-weighted funding rates and liquidation data show shorts tightening control of the market
• Privacy-token rotation and fading momentum deepen pressure on the Zcash price

Zcash slipped again on Monday, extending a five-day slide that has steadily chipped away at last week’s short-lived attempt at recovery. The downturn began after the token was pushed back from its 50-day moving average, a level that had briefly offered hope before sellers stepped in with heavier conviction.

By midday, the Zcash price hovered near $372, down 8% in the past day. Trading volume reached $557 million, and market capitalization fell to $6.14 billion, reflecting the increased churn as traders unwound positions. The decline also dragged ZEC back toward the lower edge of a broader structure that had held firm only days earlier.

Market Structure Weakens as Momentum Fades

Notably, the broader setup has grown more fragile with each session. ZEC now trades beneath both the 20-day and 50-day moving averages, positioned at $442 and $429, leaving the token’s price action stranded below the short- and mid-term trend markers.

The slide has also pulled the token closer to the lower boundary of a symmetrical triangle, brushing levels that earlier served as a soft cushion near $338. This signals that sellers are testing resolve rather than stepping back.

Historically, sustained trade near the lower arm often precedes either a breakdown or a sharp defensive bounce. So far, the defense has been thin. Momentum readings reinforce the picture.

The relative strength index sits at 38, a level consistent with sustained selling pressure. The indicator continues to slope downward, suggesting bears still control the tape without yet reaching exhaustion levels.

Privacy Tokens See Rotation After an Overextended Run

Outside the chart, broader market behavior has added weight to the decline. Privacy-focused tokens have been undergoing rotation after an outsized run. ZEC posted a 608% gain year over year, while peers such as Monero recently printed record highs. That performance left positioning crowded and sensitive to any shift in sentiment.

Regulatory developments provided the initial catalyst. On January 14, the U.S. Securities and Exchange Commission closed its review of Zcash without enforcement action. The announcement briefly lifted prices, but the reaction proved short-lived. With uncertainty removed, traders used the clarity to close out winning positions, turning relief into an exit window.

Liquidity numbers point to the same dynamic. ZEC’s 8.4% turnover ratio suggests the market has enough depth for retail rotation but not enough to absorb wide profit-taking without visible slippage. That combination tends to accelerate moves already in motion.

Derivatives and Liquidations Data Reinforce Bearish Bias

Futures metrics leave little ambiguity. The funding rate, now at -0.0638%, shows short positions carrying the incentive. While this is not extreme, it signals steady confidence from traders expecting lower prices ahead.

Liquidation data paints a more abrupt picture. Figures show $10.77 million worth of long positions flushed out in the past 24 hours. Yet, only $527.8K in shorts met the same fate, revealing a pronounced imbalance.

The forced selling from long squeezes added pressure to a market already tilting downward, pushing ZEC into a steeper slide than spot indicators alone would have predicted.

Key Levels Now in Focus

With pressure entrenched, attention has turned to downside levels. A decisive break below the triangle’s support trendline would open the door to the $319–$291 range, an area that previously served as resistance before turning into a durable base.

Any recovery attempt, on the other hand, would need to force its way back to the 23.6% Fibonacci level at $406. Only then would ZEC have a realistic chance of retesting its moving averages, though the path back into neutral territory looks considerably tougher than it did a week ago.

For now, the Zcash price remains under pressure, guided more by sellers managing exits than buyers asserting control.