ZEC at $447: Will it reach the 'inflection point'… The time lag between on-chain demand with disconnected links and retail investors' over-enthusiasm

Zcash(ZEC)‘s November rally is faltering. As retail investors’ excessive position concentration intensifies in both spot and futures markets, the on-chain demand that originally drove this rally has strangely disappeared. Currently recording $447.03, ZEC has gained +18.17% as of the 7th, but the prolonged weekly correction phase is ringing technical warning bells.

Sudden Halt in Shielded Pool Inflows… Has the Growth Engine Stalled?

In September and October, ZEC experienced nearly 1,000% growth driven by surging demand for privacy assets. According to ZECHUB data, the ZEC deposits into the Orchard(Orchard) pool surged, causing a ‘supply compression effect’ that accelerated price increases by temporarily locking up market circulation.

However, since November 4th, the situation reversed. The Orchard pool balance peaked at 4.21 million ZEC, after which inflows essentially stopped. This signals that new shielded demand has dried up, but more concerning is the movement in the older Sapling(Sapling) pool. As unshielded(unshielded) unlocking transactions gradually increase, the pool’s balance is shrinking. This indicates that the basic yield of shielded assets is weakening.

Spot and Futures Markets on Exchanges: Only ‘Hot’ for Retail Investors

While on-chain data cools, retail traders’ sentiment in derivatives markets paradoxically becomes even more heated. According to CryptoQuant data, the proportion of retail trading in ZEC’s futures and spot markets has entered a historically overheated zone at record highs.

This pattern was also seen just before market peaks in May and November 2021, and afterward, large corrections followed, raising concerns among market participants. According to CoinGlass, ZEC’s open interest (OI) in futures contracts has decreased by 7.71% over the past 24 hours to $97.39 million, signaling that investors are unwinding leverage positions due to fears of increased volatility or a downturn.

Signals from Technical Indicators

The daily RSI (Relative Strength Index) is at 46, below the neutral 50 level. This indicates that the market has not yet entered oversold territory, leaving room for further downside pressure.

The MACD (Moving Average Convergence Divergence) has been trending downward toward the zero line after a death cross (bearish signal) over the past 20 days. If it enters negative territory, a prolonged downtrend is likely.

The key level to watch is the 50-day EMA (Exponential Moving Average), approximately at $436. Currently, ZEC is testing this psychological support. If the daily close falls below this level, the next support is at the 100-day EMA around $315, implying over 30% additional decline from current levels and essentially erasing most of the recent gains made over the past few weeks.

Possibility of Rebound and Conditions

If ZEC successfully rebounds from the 50-day EMA on technical grounds, the first target is to recover to $500. Subsequently, stabilizing at $600 and attempting to retest the recent high of $750 (November 7th) could be considered.

However, the key issue is that such a rebound would lack on-chain demand support. A rally driven solely by retail buying psychology carries high volatility and the risk of sudden, unpredictable drops.

Experts warn that the liquidity accumulated by retail investors could be exploited by large investors for profit-taking, which best explains the current market structure.