Zcash rebounded from a midweek drop tied to hot US inflation data and climbed back above $800, but overbought momentum and a long-term bearish divergence point to renewed correction risk. A liquidation cluster between $835 and $840 sits as the market's clearest short-term target.
Zcash opened Aug. 26 at $767.91 before falling to $760.30 as hotter-than-expected US inflation data pressured risk assets. The token then recovered and traded near $807 on Aug. 28, about 6% above Wednesday's opening level.
Zcash rally cools after touching an eight-year high
The rebound follows a sharp run that lifted ZEC from below $500 in mid-August to an eight-year high near $880, with the steepest leg starting around Aug. 19 when the token broke out of a consolidation between roughly $480 and $520. ZEC has since settled into a wider range between $760 and $850, and repeated upper wicks between $840 and $880 show traders taking profit near recent highs.
Market attention also remains on a possible conversion of the Grayscale Zcash Trust into a spot ETF on NYSE Arca, which has supported institutional interest. Zcash's Network Upgrade 7 process is adding to that interest, with proposals under discussion to cut block times from 75 seconds to 25 seconds and change the network's issuance schedule.
Liquidation map puts $840 in focus
A three-day liquidation heatmap shows a heavy concentration of leveraged positions between about $835 and $840, the brightest band just below $840. A move into that zone could force short positions to close and help ZEC retest $850, with continued buying pressure putting the $880 peak back in play.
Liquidity near the current price, around $800 to $810, is thin, which may let ZEC move quickly once it breaks its range. On the downside, liquidity is concentrated near $775 and more heavily around $750, so a rejection from $835-$840 could send the token back toward $780 before losing that level exposes the $750 pool.
Technicals stay bullish but stretched
ZEC trades at $805.19, far above the daily Bollinger Band midpoint of $625.69, with the upper band expanded to $921.03. Daily RSI stands at 72.29, above the overbought threshold of 70, supporting the uptrend but leaving it vulnerable to profit-taking. ZEC still holds above 4-hour Supertrend support at $731.71; a daily close below that level would weaken the trend and expose the $680-$700 breakout region.
Crypto analyst Crypto Patel pointed to a bearish divergence on Zcash's two-week chart, where price has pushed higher while momentum weakened. According to the analyst's chart, previous ZEC cycles included drawdowns of 97.94% between 2018 and 2020 and 95.74% between 2021 and 2024, though the current market structure and potential institutional products differ from those earlier periods.
The bullish case needs ZEC to hold $780, clear the $835-$840 liquidity wall and break the $880 high. The bearish path starts with another rejection near $840 and a break below $780, exposing $750 and the Supertrend line at $731.71. US investors will also watch inflation expectations and the proposed ETF, which could give ZEC a separate source of demand.
Source: crypto.news
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