Zcash also known as ZEC has moved higher today while much of the crypto market remains calm. The price gained more than ten percent in a short time and pushed ZEC into the list of top daily movers. At first look the move feels strong. But a deeper look shows that this rally is not supported evenly across the market. Most of the buying pressure is coming from speculative traders while long term buyers in the spot market are stepping back.
ZEC reached the area around three hundred eighty four dollars during the move. This level had acted as resistance before so reclaiming it looks positive on the surface. Still price alone does not tell the full story. To understand what is happening it is important to look at where the money is coming from and what type of traders are active.
Most of the recent demand for ZEC is coming from the perpetual futures market. This is where traders use leverage to bet on short term price moves. Data shows a clear rise in open interest. This means more money is being placed into open contracts. At the same time the funding rate is positive. A positive funding rate means long traders are paying short traders. This usually happens when many traders expect the price to keep rising.
In simple terms more people are betting on higher prices using leverage. Around seventy one million dollars has entered these leveraged positions in a short period. This flow of money can push price up fast. That is exactly what ZEC has shown today. But this type of move can also be fragile. If price stops rising these traders may rush to exit which can reverse the move quickly.
While futures traders are active spot traders are doing the opposite. Spot trading reflects people buying or selling the actual asset without leverage. Over the last two days more ZEC has been sold than bought in the spot market. Around thirty one million dollars worth of ZEC has been sold. This means real holders are taking profit or reducing exposure instead of adding to positions.
When spot selling happens during a price rally it creates risk. It shows that the move is not backed by steady demand. Almost half of the money that entered leveraged trades has already been matched by spot selling. This weakens the foundation of the rally.
Another signal comes from liquidation data. This data shows where forced closures may happen if price moves sharply. Right now the largest concentration of potential liquidations sits below the current price. This suggests that if momentum fades price could be pulled lower as traders positions get closed. A move toward the three hundred fifty dollar area becomes possible if selling pressure grows.
This does not mean ZEC must fall right away. Speculative rallies can last longer than expected. But without new spot buying the risk of a pullback remains high. Strong and healthy rallies usually need both futures traders and spot buyers moving in the same direction.
For now ZEC strength looks driven by short term bets rather than long term confidence. Traders should watch whether spot demand returns. If it does not the recent gains may struggle to hold.
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