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The price of Zcash remains under intense pressure as the bearish momentum in the market continues. After losing almost 35% since the end of January, Zcash (ZEC) is now starting to slip deeper into a bearish channel that has driven prices lower for months.
Weak volume, declining whale interest and declining derivatives activity are all fueling a downward trend. With many indicators showing warning signs, the charts now indicate that Zcash may be entering another phase of collapse.
The break of the bearish channel and the OBV show continued selling pressure
Zcash has been trading in a clear bearish channel since November, marked by persistent lower highs and lower lows.
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After the peak above $740, The ZEC has entered this bearish range and has already seen a major collapse of more than 56% in the channel, which is also the breakdown target. Each rebound has become weaker, which indicates that buyers are unable to change the momentum.
The structure of weakness is confirmed by tracking the balance volume (OBV) of buying and selling pressure by adding the volume over the days and subtracting it over the days. A high OBV indicates accumulation, while a low OBV indicates distribution.
From the beginning of November to the end of January, the OBV indicator of Zcash formed an upward trend line. This showed that some Zcash Buyer They were still trying to accumulate, even with the price trading in a bearish channel.
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This support finally failed on January 29. Since this crash, Zcash has already fallen about 36%. This confirms the OBV signal and shows that the loss of volume support translated directly into lower prices.
The behavior in the chain reinforces this tendency. Over the past seven days, whale transactions have fallen by around 36%, with a large number of portfolios falling towards the 8,000 range. This suggests that large stakeholders are reducing exposure rather than accumulating it.
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Meanwhile, exchange balances have increased by almost 160%. A higher exchange supply usually means more tokens have been prepared for sale, increasing immediate selling pressure.
Together, the descending channel, the collapse of the OBV, the reduced whales and the exchange flows indicate a sustainable distribution. Retail participation is declining, long-term holders are reducing exposure, and supply is shifting toward short positions. This combination explains why Zeke continues to struggle to maintain support.
Derivatives activity weakens as risk increases in remaining long positions
With spot participation declining, the next question is whether derivatives can push prices higher, as happened in the previous short selling period.
So far, the data suggests limited support.
Open interest on Zcash peaked at close to $1.13 billion in December. It’s now down to about $395 million, a drop of nearly 65%. This shows that speculative interest has decreased drastically, as many traders have closed positions and moved to the margin.
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When open interest falls from this, it indicates a decrease in conviction. There is less leverage in the system to drive strong rebounds, and fewer traders willing to defend key levels.
Meanwhile, funding rates have fallen since October, but remain slightly positive. Positive funding means that long positions still dominate, even if public participation is declining. In simple words, there are fewer active traders, but many of those who remain are still betting on higher prices.
This creates a fragile environment. If prices fall further, these remaining long contracts become subject to liquidation. When liquidations occur in conditions of low liquidity, they can lead to rapid downward movements.
So, even if the derivatives no longer have enough “fuel” to drive a significant rally, having short positions still increases the risk of a crash. Instead of supporting the price, leverage now increases the opportunity for an accelerated sale.
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Key Zcash price levels show why the $100 area remains in focus
The Zcash price remains trapped in its descending channel, with the lower trend line continuing to drive the price lower. The first major support zone is located at $230.
A sustained daily stop below $230 exposes the next support near $212, but not without causing a breakout of the trend line.
If $212 fails, the width of the channel and the Fibonacci expansion point to the area of ​​$103. This area represents the complete negative movement implied by the current structure.
On the positive side, recovery is still difficult. ZEC must first Recover $286 to restore short-term stability. Improving the medium-term structure requires a move above $389. A rally towards $557 would require a significant rebound in volume, whale accumulation and derivatives participation, making that unlikely in current conditions.
As long as Zcash remains below $230 and fails to hold $212, downside risks dominate. Without renewed participation and capital flows, the charts continue to support a move towards the $100 region.
