Zcash: Examining the Risk of ZEC Price Decline Toward $301

Zcash (ZEC) has experienced significant selling pressure, dropping to levels not seen since early December. Despite some whale buying activity, the overall market trend remains bearish. This article explores recent trends in ZEC trading, whale activities, and potential price movements.

Key Takeaways

Zcash (ZEC) has dropped significantly, currently trading around $347.
Whale buying activity has decreased despite some notable purchases.
ZEC's Spot Netflow has shown negative trends, indicating increased capital inflow.
The Stochastic RSI indicates strong bearish momentum, suggesting potential further price declines.

Zcash Drop 5% Despite $3mln in Whale Buys

Current ZEC Market Status

Following the recent market downturn, Zcash (ZEC) has plummeted to levels last seen in early December, hitting a low of $335. For five consecutive days, ZEC has recorded lower lows, highlighting persistent bearish sentiment. At the time of writing, ZEC is priced at approximately $347, reflecting a decline of 5.98% over the week.

Despite this downward trend and the fact that ZEC has fallen below its short-term moving averages (MAs), some investors, particularly whales, have begun to buy into the dip.

Whale Activity in Zcash

After Zcash faced rejection at the $449 mark a week prior, the activity among whales has notably decreased. Current data from TradingView indicates that whale buy volumes attained a peak of 152.4k. Although the activity has slowed down, indicating reduced risk appetite, significant purchasing has still occurred.

Zcash whale buy activity Source: TradingView

Simultaneously, the Average Buy Volume has stabilized around 29k, maintaining this level for three consecutive days. This trend suggests that whales remain somewhat active, despite the ongoing market downside. Notably, Onchain Lens revealed that a recently created wallet withdrew 8,551 ZEC, valued at $3.12 million, from Binance, with potential for more withdrawals. This wallet now holds 12.5k ZEC, equating to $4.54 million, as per Arkham data. Continued whale accumulation during market downturns often reveals a strong belief in the asset.

Capital Flow in Zcash

Exchange activities align with a growing accumulation phase for Zcash. According to data from CoinGlass, ZEC's Spot Netflow has remained negative for eight days, with a current figure at -$5.87 million, suggesting substantial capital inflow into the asset. Over this timeframe, investors have injected around $414 million back into the market.

Zcash spot netflow Source: CoinGlass

Typically, such increased outflows can create scarcity and reduce the circulating supply, which can absorb selling pressure. This condition frequently leads to increased prices.

Assessing Demand for Zcash

Despite whale purchases as ZEC's value declines, the mounting selling pressure from other market participants indicates a troubling trend. The downward momentum remains high, supported by Zcash’s Stochastic RSI, which recorded a bearish crossover days ago, dropping to 11.96 at the time of writing and moving further into oversold territory.

ZEC EMA & Stoch Source: TradingView

When the Stochastic RSI reaches such low levels, it signals a strong dominance by bears over bulls, indicating that selling pressure persists. As a result, the demand from whales appears insufficient to counteract this bearish trend. With ongoing bearish momentum, the risk of ZEC dropping to $301 remains high. Should whale demand increase, Zcash could experience a rally, targeting immediate resistance at $390.

Conclusion

In summary, while the current Zcash market exhibits notable whale buying, the overall bearish sentiment looms large. Investors should keep a close watch on market indicators and whale activities that may influence future price movements.