After recording spectacular gains exceeding 1,000% since January, Zcash is going through a turbulent phase marked by a sharp 24% drop in one day. But behind this sharp drop, conflicting signals emerge: some crypto investors see a buying opportunity, while the derivatives markets sound the alarm.
In brief
- •Zcash recorded a 24% drop in 24 hours despite an annual gain of over 1,000%.
- •Retail investors accumulated 72 million dollars of ZEC during the decline.
- •A massive outflow of 236.6 million dollars hit the derivatives market.
- •The Money Flow Index (MFI) remains above 50, suggesting continued capital inflows.
Sharp Drop for Zcash After a Year of Exceptional Gains
Zcash experienced one of the most violent corrections in the crypto market this week. While the overall crypto capitalization slipped below 2.9 trillion dollars, ZEC lost 24% of its value in one day.
This represents a spectacular setback for a cryptocurrency that recently still showed an annual performance exceeding 1,000%.
However, on-chain data reveals unexpected behavior. According to CoinGlass, retail investors accumulated 72 million dollars worth of tokens on spot during this decline phase.
This massive accumulation reflects a conviction: many perceive this correction as a bargain rather than a warning signal. Historically, such buying movements during declines 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 funds continue to flow in despite volatility. Analysts identify a strategic demand zone between 440 and 507 dollars, where buyers could massively step in.
Derivatives Markets Signal Caution
The picture becomes more complex on the derivatives markets side. In just 24 hours, 236.6 million dollars left this segment, dropping open interest to 861.5 million dollars. These outflows reflect growing nervousness: traders anticipate increased volatility and prefer to reduce their exposure.
This uncertainty triggered a cascade of forced liquidations reaching 32.95 million dollars. Long and short positions were swept away, illustrating the violence of price movements.
The Chaikin Money Flow (CMF), which measures buying pressure versus selling, begins to falter. If this indicator crosses the neutral 0.00 level to turn negative, sellers could definitely regain control and push ZEC towards lower floors.
Nevertheless, a glimmer of hope remains. The weighted funding rate has returned to positive territory at 0.0195%. This switch suggests that long positions regain attractiveness and that sentiment could reverse.
For optimists, the current correction would be only a “technical reset” after too rapid a rise, not a true trend reversal.
Zcash is going through a classic turbulence zone after a meteoric rise. Massive accumulation by spot investors and still favorable technical indicators argue for a temporary consolidation. But caution remains essential: if derivatives continue to drain and CMF turns negative, the 2025 rally could well have reached its peak.