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The price of Zcash is facing renewed selling pressure after a sharp drop of 16% in the last 24 hours, pulling the altcoin from its attempt to move above $400.
The rejection caused a delay in Zcash’s attempt to regain higher levels, and a prolonged delay could present additional challenges for traders if market sentiment weakens again.
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Zcash is decoupling from Bitcoin
The correlation between Zcash and Bitcoin has been declining in recent days, falling below the zero line again. A negative relationship means that ZEC no longer moves in parallel with the BTC price trend.
This may initially appear to be a neutral situation, but it introduces an unusual risk dynamic. If Bitcoin rises, ZCash cannot benefit from the general optimism in the market.
On the contrary, if Bitcoin falls sharply, ZEC can unexpectedly move higher, but without ensuring sustained strength.
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The liquidation card adds another layer of caution to ZEC holders at the moment. Traders in long positions face high liquidation risk, with about $17.49 million exposed in long contracts if ZEC falls to $300 or below.
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These potential qualifiers represent a major pressure point on optimistic sentiment.
If prices approach this limit, subsequent liquidations may accelerate the downward movement. These events often push traders out of long positions and discourage them from opening new long positions, contributing to a feedback loop that reinforces downside momentum.
The ZEC price faces resistance
ZEC is trading at $339 and moving around the $344 support level after the sharp drop from the daily highs. The sharp selloff and weak market structure indicate that more downside is possible in the near term.
If the downward momentum continues, ZEC could fall Towards a critical support at $300. Missing this level will probably cause a playoff pool of $17.49 million. That could push the price to $260 as the forced selling intensifies.
However, if momentum changes and buyers return, ZEC could stabilize at $344 and will start trying to recover around $403. A successful break above this level will invalidate the bearish theory and restore confidence among long traders.
