The price of Zcash (ZEC) is currently below $1,550 on Monday, continuing a downward trend after a 4% drop the day before. Despite this, there’s significant institutional interest in the privacy coin, with more than $35 million in inflows last week. However, retail enthusiasm seems to be waning, as evidenced by a roughly 10% decline in ZEC futures Open Interest over a 24-hour period. The technical analysis suggests a near-term correction could occur, with a support level forming around $1,420.
ETF inflows reflect long-term confidence amid short-term retail challenges
Grayscale’s Zcash-focused Exchange-Traded Fund (ETF), known as ZCSH, saw inflows of $35.17 million last week, pushing its monthly total to $284.29 million. This represents the fifth week in a row of positive inflows, indicating strong confidence in Zcash’s long-term growth potential. Additionally, the ZCSH fund is set to implement a 3-for-1 forward share split on Monday due to continued demand.
On the flip side, retail interest in Zcash appears to be decreasing in the short term. According to CoinGlass, the ZEC futures Open Interest has dropped 10% in the last day, now at $3.11 billion, signaling a mild correction in positions. Liquidation figures show that long liquidations at $6.74 million outpaced short liquidations, which were only $1.99 million, indicating a shift away from bullish positions and more selling pressure.
Nonetheless, the ZEC Open Interest remains above the $3 billion mark, reflecting a steady rise from $770.27 million on August 1.
Technical outlook: Zcash’s temporary downside risk below $1,500
As of Monday, Zcash is trading around $1,540, marking a nearly 3% decrease in intraday value, following a 4% drop on Sunday from a peak of $1,680. The coin faces short-term weakness as it tests the 50-period Exponential Moving Average (EMA) at $1,529 on the four-hour chart, while the long-term trend is supported by the 100-period EMA near $1,421 and the 200-period EMA around $1,229.
Momentum seems to be declining; the Relative Strength Index (RSI) sits at 45 on the four-hour chart, dipping below the midline. Additionally, the Moving Average Convergence Divergence (MACD) has crossed below its signal line, suggesting a reduction in bullish pressure instead of a significant trend reversal.
A confirmed breakdown below the 50-period EMA at $1,529 could bring the 100-period EMA at $1,421 and the high from September 9 at $1,296 into focus.
If Zcash can manage a rebound from the 50- or 100-period EMAs at $1,529 and $1,421, it’s crucial for it to surpass the $1,680 swing high for a sustained upward trajectory, potentially aiming for the $1,700 benchmark.
