Zcash Price Analysis: Bullish Structure Holds Despite Short-Term Weakness. Source: Photo by AlphaTradeZone

Zcash price action remains constructive despite recent weakness, with ZEC still up nearly 40% over the past 30 days after rebounding strongly from early December lows. This performance highlights a broader recovery trend, even though momentum has cooled in the short term. Over the past seven days, Zcash has declined around 8%, underperforming Bitcoin, which has continued to push higher. This divergence is important, as Zcash has historically shown a negative correlation with Bitcoin, often delaying near-term breakouts when BTC strength dominates the market.

Despite the pullback, Zcash’s overall bullish structure remains intact. Price action continues to consolidate following a strong impulse move from early December, forming a bull flag rather than a topping pattern. As long as this structure holds, the broader breakout thesis, including the projected 85% upside move, remains valid. However, underlying momentum indicators suggest caution. The Chaikin Money Flow (CMF), which measures capital inflows and outflows, has trended lower even as price attempted to stabilize. Between December 24 and January 5, ZEC moved higher while CMF declined, signaling weakening buying pressure.

CMF is now hovering near the zero line, a critical threshold. A sustained move below zero would suggest capital outflows, increasing the risk of short-term downside. This risk is amplified by the recent unshielding of approximately 202,000 ZEC, representing about 1.2% of the circulating supply. While unshielding does not automatically imply selling, it does increase visible supply and can weigh on price if demand softens.

Derivatives data reinforces the idea of near-term pressure but longer-term support. Short-term liquidation data shows heavier short exposure, increasing volatility risk, while the 30-day view favors long positions, indicating continued confidence among longer-term traders. Bitcoin’s strength remains a key variable, as Zcash’s negative correlation continues to suppress upside momentum.

From a technical perspective, ZEC must reclaim higher resistance levels to confirm a breakout. A decisive move above $519 would signal renewed strength, while clearing $541 could trigger short liquidations and accelerate gains. On the downside, $404 remains the critical support level. Losing it would invalidate the bullish structure and suggest a deeper correction. Overall, Zcash remains structurally bullish, but patience may be required as short-term pressures play out.