Zcash (ZEC) extended its losing streak on Wednesday, tumbling 13% over the past 24 hours and breaking below the psychologically important $1,000 level. The privacy-focused cryptocurrency has now shed more than 20% in five days, as hotter-than-expected US inflation data reinforced fears that the Federal Reserve will keep monetary policy tight.
The latest Consumer Price Index (CPI) report showed consumer prices rose 0.4% in October, surpassing the 0.3% consensus forecast. Core prices, which exclude food and energy, also came in above expectations at 0.3% versus 0.2%. Although the monthly increase was lower than September's 0.6%, the upside surprise has strengthened the case for another interest rate hike at the Fed's December 8-9 meeting.
Bitcoin slipped below $74,000, while Zcash's decline accelerated, dragging its price closer to the $1,000 mark. The broader sell-off triggered significant liquidations in the derivatives market, with CoinGlass reporting over $700 million in positions wiped out in the last 24 hours. Long traders bore the brunt, accounting for roughly $551 million of the total, as leveraged bets on higher prices were forcibly closed, amplifying the downward move.
Grayscale's campaign fails to stem losses
Zcash's slide comes despite renewed support from Grayscale, the digital asset investment firm. Grayscale recently launched a Zcash-focused marketing campaign, including a full-page advertisement in The Wall Street Journal, and has committed sponsor fees to initiatives supporting the Zcash network, such as development, marketing, community engagement, and education. However, these efforts have done little to offset the prevailing risk-off sentiment.
Derivatives data indicate growing caution among traders. According to CoinGlass, the Zcash futures taker buy-to-sell ratio fell to 0.93 on Wednesday, a reading below 1 suggesting that aggressive sell orders are outpacing buy orders.
Technical breakdown points to $880
Zcash's technical picture has deteriorated sharply after breaking below key support levels. At the time of writing, ZEC is trading below $1,000 and has fallen beneath its 50-day Exponential Moving Average (EMA) at $1,202, signaling a firm shift in favor of sellers. The next major support is the 200-day EMA near $880, which has become a likely downside target following the breakdown from a consolidation range.
If ZEC fails to stabilize around the $1,000 psychological level, selling pressure could accelerate toward the 200-day EMA at $880. A drop to that region would represent a further setback for buyers attempting to defend recent gains.
Momentum indicators reinforce the bearish outlook. On the daily chart, the Moving Average Convergence Divergence (MACD) has moved below the zero line, with negative histogram bars expanding. The Relative Strength Index (RSI) has declined to approximately 34, approaching oversold territory but still above the conventional 30 threshold. The combination of a negative MACD, falling RSI, and a breakdown below major support suggests ZEC remains vulnerable to further losses.
Despite the current weakness, a short-term recovery is possible if buyers step in near the $1,000 level. The first significant resistance sits at $1,050, which previously acted as support before Tuesday's breakdown. Beyond that, the next resistance is $1,112, corresponding to the lower boundary of Zcash's prior consolidation range. Reclaiming this level would improve the near-term technical structure and potentially open the door for a recovery toward the 50-day EMA around $1,202.
This article is for informational purposes only and does not constitute financial advice.
