Zcash recorded a 7% price decline over the past 24 hours, while broader cryptocurrency markets also slipped. However, large holders reduced their positions by approximately 38% over the past seven days, raising concerns about the cryptocurrency’s near-term prospects.
Summary
- Large holders reduced their stakes by 38% over the past week, and technical analysis suggests a bearish flag pattern.
- Zcash has seen a 40% drop month-over-month.
- The concentration of 70% of the supply in the top 100 addresses suggests Zcash’s current price foundation may be unstable.
The privacy-focused cryptocurrency has increased 5.8% over the past week, but decreased over 40% month-over-month, according to CoinGecko.
Bitcoin and Ethereum experienced larger declines during the same period as the broader cryptocurrency market continued its selloff.
Exchange flow data showed net outflows on Feb. 12, indicating some purchasing activity. However, on-chain data revealed that large holders decreased their Zcash holdings by roughly 38% over seven days, with additional selling occurring in the past 24 hours. Exchange inflows increased simultaneously, suggesting coins moved from private wallets to exchanges.
Technical analysts identified a bearish flag and pole pattern forming on Zcash price charts. This formation typically appears after a sharp decline, followed by a consolidation period. When prices break down from this pattern, the resulting decline often matches the distance of the initial drop, according to technical analysis methodology. For Zcash, this measured move indicates a potential 66% decline from current levels if the pattern completes.
A four-month bearish divergence signal has also formed between October and February. During this period, Zcash prices reached a higher high while the Relative Strength Index (RSI), a momentum indicator, recorded a lower high. This divergence typically indicates weakening buying pressure despite rising prices.
The RSI continues to trend downward while prices remain near recent highs, creating a widening gap between price action and momentum indicators.
On-chain data shows the top 100 addresses control approximately 70% of the total supply. Smart money indicators remained flat with no significant accumulation detected, according to blockchain analytics.
The cryptocurrency rebounded from lows reached in early February. Technical analysts stated that a breakout above resistance levels would be required to invalidate the bearish setup, while a breakdown below key support would likely accelerate declines.
Market observers noted that the relative outperformance compared to other cryptocurrencies occurred while large holders distributed their positions, creating what analysts described as a potentially unstable foundation for current price levels.