After recording spectacular gains exceeding 1,000% since January, Zcash is going through a phase of turbulence marked by a brutal fall of 24% in one day. But behind this sharp fall, contradictory signals are emerging: some crypto investors see a buying opportunity, while derivatives markets are sounding the alarm.
In brief
- Zcash saw a 24% drop in 24 hours despite an annual gain of over 1,000%.
- Retail investors accumulated $72 million in ZEC during the decline.
- A massive outflow of $236.6 million hit the derivatives market.
- The Money Flow Index (MFI) remains above 50, suggesting continued capital inflows.
Dry fall for the crypto Zcash after a year of exceptional gains
Zcash experienced one of the most violent corrections in the crypto market this week. As the global capitalization of cryptos slipped below $2.9 trillion, ZEC gave up 24% of its value in the space of a day.
A spectacular setback for someone who until recently posted an annual performance exceeding 1,000%.
However, on-chain data reveals unexpected behavior. According to CoinGlass, retail investors accumulated $72 million worth of spot tokens during this decline phase.
This massive accumulation reflects a conviction: many people perceive this correction as a boon rather than a warning signal. Historically, such buying movements during dips often precede significant rebounds, especially when fundamentals remain strong.
The Money Flow Index (MFI) reinforces this optimistic scenario. This technical indicator remains anchored above the bullish threshold of 50, confirming that capital continues to flow despite volatility. Analysts identify a strategic demand zone between $440 and $507, where buyers could massively intervene.
Derivatives cast a dampener on the euphoria
The picture becomes more complex when it comes to derivatives markets. In just 24 hours, $236.6 million left this segmentdropping open interest to $861.5 million. These outflows reflect growing nervousness: traders anticipate increased volatility and prefer to reduce their exposure.
This uncertainty caused a cascade of forced liquidations reaching $32.95 million. Both long and short positions were swept away, illustrating the violence of the price movements.
The Chaikin Money Flow (CMF), which measures buying versus selling pressure, is starting to weaken. If this indicator crosses the neutral level of 0.00 into negative territory, sellers could definitively regain control and push the ZEC towards lower floors.
However, a glimmer of hope remains. The weighted financing rate returned to positive territory at 0.0195%. This shift suggests that long positions are regaining attractiveness and that sentiment could reverse.
For optimists, the current correction would only be a “technical reset” after a too rapid rise, not a real trend reversal.
Zcash is going through a classic zone of turbulence after a meteoric rise. The massive accumulation by spot investors and the still favorable technical indicators argue for a temporary consolidation. But caution remains in order: if the derivatives continue to empty and the CMF turns negative, the 2025 rally could well have reached its peak.
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