Zcash Plunges 32%: Technical Breakdown Signals More Downside Risk

The sell-off accelerated after ZEC breached a series of crucial technical levels in quick succession. According to the analysis, the token broke below its 50-day simple moving average, the $480 horizontal support zone, and the 38.2% Fibonacci retracement level. This technical failure opened the door to a swift descent into the first major liquidity area around $400. The price action confirms a shift in structure, with momentum now firmly favoring the downside after the asset’s dramatic multi-month rally.

Crypto analyst Ardi had warned of this growing weakness, pointing specifically to a failed breakout in the Relative Strength Index (RSI) trend. “Repeated warnings of structure being broken” were issued following the loss of early support levels. The breakdown did not stop at $400; Zcash continued lower to test a second liquidity zone near $370, a level where Ardi noted he closed half of his short position. The next critical area to watch, should $370 fail, is between $297 and $311. This zone encompasses the significant 61.8% Fibonacci retracement level and a large pool of historical liquidity.

The steep decline has been exacerbated by leveraged market positions. Ardi cautioned that overexposed long positions created significant risk, noting that “5% moves were causing a cascade of liquidated long positions,” which in turn led to even larger drawdowns. This liquidation spiral is reflected in the spike in trading volume, which crossed $1 billion in the past 24 hours as ZEC traded between $356 and $457.

Technical indicators uniformly support the bearish narrative. The Moving Average Convergence Divergence (MACD) continues to trend lower, with its signal line confirming negative momentum. The increasing size of red histogram bars on the MACD indicates strong and growing selling pressure. Meanwhile, the Money Flow Index (MFI) sits around 35, pointing to continued capital outflows, though it is nearing levels that have preceded past reversals. Analyst Ali Martinez highlighted that ZEC had returned to and then broken a known support zone near $440, a move that confirmed lower lows and maintained the bearish market structure.

Market opinion on Zcash’s future trajectory is sharply split. Prominent skeptic Max Keiser delivered a stark prediction, stating, “The $ZEC ‘pump ‘n dump’ is over. A trip back to $55 looks inevitable.” This view reflects a growing sentiment that the recent parabolic rise was unsustainable and that a deep retracement is now underway.

Countering this extreme bearishness is a potential long-term catalyst from the institutional side. It was recently reported that asset manager Grayscale has plans to convert its Zcash Trust into an exchange-traded fund (ETF). If approved by regulators, a Zcash ETF would provide a streamlined, regulated avenue for investors to gain exposure to ZEC without the complexities of direct custody, potentially attracting a new class of capital to the asset. For now, however, the immediate technical picture and market sentiment remain overwhelmingly negative, leaving traders to watch whether the $370 liquidity zone will hold or break.