Zcash experienced a sharp price drop this week due to an unexpected governance shock. Panic selling by investors caused the ZEC price to fall by more than 20% in just one day yesterday, briefly dropping to around $380. Subsequently, buying pressure returned, leading to a rebound of approximately 17%, and Zcash is now trading above $440.
Immediate fear has somewhat subsided, but technical damage remains due to ongoing sell pressure. Meanwhile, strong buying interest has been detected below the recent drop zone. Zcash now finds itself between a fragile chart structure and clear accumulation pressure.
Governance shock… Zcash still at risk of 30% decline
The sharp decline in Zcash occurred shortly after reports that the core development team had left. The market interpreted this as a failure at the project level, leading to forced selling and a rapid price collapse. Later, it was clarified that this action was a restructuring of governance, not a protocol issue, stabilizing the atmosphere and resulting in a rebound.
Despite this rebound, vulnerabilities remain on the chart. Zcash is trading within a rising wedge pattern on the 12-hour chart. If the support line in this structure breaks, the risk of decline increases.
Additionally, the moving average (EMA) placement of the bearish signals is also being observed. The EMA is a trend indicator that gives more weight to recent prices, useful for capturing momentum changes. In the Zcash chart, the short-term 20-day moving average is approaching the slower 50-day moving average. If this bearish crossover is formed and confirmed, it will signal a weakening trend.
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If Zcash breaks down through the lower trend line of the wedge formation, the anticipated decline could reach about 30%. This target is calculated based on the vertical distance between the upper and lower trend lines of the wedge structure. The rebound has reduced short-term fear, but this risk has not been completely alleviated.
Whales, purchasing $3.2 million
The chart has weakened, but on-chain behavior shows a different picture. Large holders actively accumulated during the decline and viewed the drop caused by governance issues as an opportunity.
In the last 24 hours, ZEC whales increased their holdings by 4.49%, expanding to a total of 8,919 ZEC. This means that approximately 381 ZEC were accumulated during the decline. The accumulation by mega whales has been even more pronounced, with holdings increasing by 19.2% to a total of 42,786 ZEC. This corresponds to approximately 6,905 ZEC in additional purchases.
In total, large holders have accumulated about 7,286 ZEC. At current prices, this represents a new purchase of approximately $3.2 million.
This accumulation has appeared alongside a decrease in exchange balances. This suggests that the held assets are being moved not for resale purposes but for long-term storage. Thanks to this buying pressure, Zcash was able to rebound quickly after a sharp decline.
Accumulation can ease the downward trend and absorb volatility, but it does not automatically reverse a bearish structure.
Decline in development activity… Zcash price inflection point
The final variable is development activity. According to the data, Zcash's development score rose to about 21.85 by the end of December, but has steadily declined to around 19.67. This downward trend began before the reports of governance issues and has continued to this day.
Historically, strong rallies in Zcash have coincided with increased development activity. The recent slowdown in development explains why prices have not held up before the panic selling. While fear has eased with governance clarification, this fundamental trend has not been reversed.
This point is important. Zcash remains one of the strongest long-term performance tokens in the market. It has risen about 66% over the last three months and is the highest performing coin in 2025. For this bullish trend to resume, stabilization of development activity and a rebound are necessary. This undervalued indicator can actually support the price.
From a price perspective, Zcash is currently at a critical decision moment. If the price stabilizes above $456, the short-term outlook improves and the risk of decline decreases. Conversely, if it breaks below the lower trend line of the wedge pattern, a 30% decline scenario reopens, with key support levels at $360, $309, and ultimately $272.
Currently, Zcash is balancing between strong accumulation and technical vulnerabilities. A significant discount has occurred due to governance shocks, and whale investors have responded actively. The subsequent price flow depends on whether development momentum and price structure can be realigned.