Zcash has grown by over 1,000% since the beginning of the year: Is the current decline a reaccumulation or a reversal?

Zcash – the leading cryptocurrency in privacy protection – has become one of the most heavily pressured assets as the crypto market collectively fell below the $2.9 trillion mark.

In the past 24 hours, ZEC has lost up to 24% of its value, clearly reflecting the weakening and exhaustion of buying power in the market. However, analysis from Coin Photon shows that behind this steep decline are signals far more complex than what appears on the surface.

Spot investors step in

In the past, whenever Zcash (ZEC) witnessed sharp drops, it was usually a sign that the market was running out of steam. But at present, a completely different story is unfolding: buying power from retail investors in the spot market has unexpectedly become the main driving force.

Data from CoinGlass shows that ZEC accumulation remains resilient despite the prolonged decline. The total spot buying value has reached $72 million — an impressive figure, often reflecting optimism as many investors view the correction phase as an opportunity to “hunt for bargains.”

NguSource: CoinGlass

When an asset is seen as undervalued, the market usually interprets this as there being plenty of room for growth. For ZEC, this further reinforces its more than 1,000% gain since the beginning of the year, raising expectations that the breakout trend may not be over yet.

Bulls still need to be cautious

Although technical indicators still maintain a bullish structure for ZEC, warning signals have begun to emerge.

The Money Flow Index (MFI) continues to rise and stays above the 50 threshold — a region considered bullish — indicating that capital is still flowing into the market. In the past, similar patterns have often appeared before strong recoveries, while also helping to identify key demand zones in the $507–440 range.

NguSource: TradingView

However, on the other hand, the Chaikin Money Flow indicator (CMF), a gauge of buying and selling pressure, is sending less positive signals as its trend turns downward. If the CMF drops below 0 and enters negative territory, bears may gain the upper hand and push ZEC prices even lower.

Where does the selling pressure come from?

Most of the recent downward pressure stems from strong fluctuations in the derivatives market over the past 24 hours. This plunge occurred right after $236.6 million exited the derivatives market, bringing open interest down to $861.5 million at the time of writing.

NguSource: CoinGlass

Such sudden movements often signal trader uncertainty, as they prepare for potentially greater volatility in ZEC. This uncertainty has simultaneously affected both Long and Short positions, resulting in $32.95 million being forcibly liquidated in just one day.

Notably, the funding rate has turned positive, reaching 0.0195%. This could be a signal that ZEC is preparing for a new recovery phase, while the recent correction is likely just a temporary pause in the larger market trend.

NguSource: CoinGlass

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