Zcash has started the new year by aiming to stabilize its situation after the turbulent period at the end of December. The privacy-focused cryptocurrency experienced a sharp decline due to the chaos caused by a mass exodus of developers, which weakened investor confidence and increased selling pressure.
ZEC's price dropped over 30% from its December highs before finding a bottom. Recent recovery suggests that major holders may be driving a new momentum.
Zcash whales come to the rescue
Blockchain data indicates that Zcash holders 'whales' have quietly moved into a collecting phase. Over the past week, addresses holding over $1 million in assets have increased their ZEC balances by nearly 13%. These wallets now collectively hold approximately 9,962 ZEC, signaling a notable shift in behavior after several weeks of distribution.
Whale accumulation often acts as a stabilizing force during correction phases. Large investors typically increase their exposure when prices appear undervalued relative to previous levels.
Want more token analyses like this? Subscribe to editor Harsh Notariyan's daily Crypto newsletter here.
In the case of Zcash, the buying activity occurred at the same time as ZEC rebounded back to the $403 level, suggesting that larger counter-trend risks may be facilitating. The return of whale demand has partially alleviated selling pressure from smaller holders.
Bullish momentum is ahead for ZEC
Technical indicators support Zcash's improving outlook. The moving average – MACD – is approaching a potential bullish crossover. The signal is not yet confirmed, but the histogram is narrowing and the red bars are steadily decreasing.
Reaching the green zone would confirm that bullish sentiment has risen above bearish pressure. Such a shift in sentiment often precedes trend reversals, especially when supported by volume and accumulation.
ZEC's recent price development reinforces this setup, as higher bases have formed starting from the $363 level. If the MACD crossover materializes, it will support the view of Zcash transitioning from a recovery phase into an early uptrend phase.
ZEC's price must overcome the obstacles
Zcash's price has risen nearly 13% over the past three days and is trading around the $421 level at the time of writing. The altcoin managed to establish $403 as a short-term support level earlier this week. Although a rebound has occurred, Zcash still needs to gain approximately 30.4% to recover December's losses, so upside potential remains if sentiment holds.
The Parabolic SAR indicator has moved below the candles, which may indicate the formation of an uptrend. If buying pressure continues, ZEC could challenge the $443 resistance level. If this barrier turns into support, a path opens toward the psychologically important $500 level in the near term.
If the breakout above the $443 level fails, the retracement will stall. Without confirmation of bullish momentum, ZEC may remain fluctuating between $403 and the resistance zone. A drop below $403 would weaken the bullish trend structure and expose Zcash once again to downside risk. In this scenario, the price could fall to $363, nullifying upside prospects and continuing consolidation.