Zcash (ZEC) extended its recovery on Wednesday, adding 2% to Tuesday's 4% gain, as the privacy-focused cryptocurrency clawed back much of the ground lost during Monday's market-wide decline. Trading near $1,264, the token is now testing a cluster of technical resistance levels that could determine its near-term trajectory.
Despite the price rebound, demand through institutional channels remains soft. Grayscale's Zcash fund (ZCSH) recorded $5.19 million in net outflows on Tuesday, following $1.66 million on Monday and $30.72 million in the prior week, according to SoSoValue data. The first two sessions of this week alone saw $6.85 million in redemptions, extending a trend that has persisted since late September, coinciding with the fund's three-for-one share split on September 30. While the timing is notable, the split itself does not necessarily explain the sustained withdrawals.
The ongoing redemptions stand in contrast to the spot market's recent strength, suggesting that institutional investors have yet to re-engage with Zcash through the investment product. For the demand picture to improve, a slowdown in outflows or a return to net inflows would provide a more supportive signal alongside the price momentum.
Technical Outlook: ZEC Tests Key Moving Averages
On the four-hour chart, ZEC has rebounded from Tuesday's low near $1,123 and is now challenging its declining 50-period and 200-period exponential moving averages, which sit at approximately $1,261 and $1,269, respectively. At $1,264, the token is marginally above the shorter-term average but remains below the longer-term barrier. A sustained move above this narrow zone would strengthen the immediate recovery, while repeated rejection could leave the token vulnerable to renewed selling.
The Relative Strength Index has climbed to around 48, indicating modest positive momentum but still below the neutral 50 mark. The Moving Average Convergence Divergence (MACD) line is also slightly above its signal line, supporting a tentative bullish shift. However, the price structure remains mixed, with improving momentum meeting overhead resistance.
For a more convincing recovery, ZEC needs to reclaim $1,320, the peak established on Monday on the four-hour chart. A sustained break above that level could bring $1,422 into focus, a price corresponding to the September 18 low and now serving as a potential upside target.
If the rebound fades, Thursday's low near $1,115 provides the next important downside reference. Below that, support stands around $1,050, corresponding to the September 4 high, with the psychological $1,000 level offering a further threshold to watch.
Zcash's immediate direction hinges on whether buyers can maintain momentum through the moving-average zone. Clearing $1,320 would reinforce the recovery, while failure to overcome resistance could expose the lower support levels again.
This article is for informational purposes only and does not constitute financial advice.
