Following an aggressive rally that pushed the token to a September high near $1,700 after breaking free from a pennant consolidation, Zcash [ZEC] price action could be on the verge of further declines.
Over the last 24 hours, ZEC has declined by about 13%, and it was testing a key demand zone between $1036 and $1162, at press time.
Notably, ZEC’s Funding Rate and Spot Netflow turned negative alongside increasing long liquidations across the network. Therefore, c ould ZEC be in for further dips, or will bulls step in at the demand zone?
ZEC’ s weakening on-chain metrics could be the fueling factor of the token’s recent bearish price action.
According to AMBCrypto’s recent analysis, the network has recorded two days of negative inflows, indicating weaker demand relative to selling pressure. Moreover, the implications of the reducing inflow could amplify the token’s current bearish bias.
At the same time, the network average aggregated Funding Rates have flattened at 1.42%, just a fraction above its predicted average funding rate of 0.29%. This suggests that bearish positioning is gaining traction in the derivatives market.
That’s not all; its increasing long liquidations show that leveraged bullish positions are being forced out as price falls. At the time of writing, Zcash long liquidations had crossed the $13 million mark, which is significantly bigger compared to just $1.3 short liquidations.
Together, the signals suggest that buyers have yet to regain control of the short-term trend.
The current demand zone is the next major test for ZEC bulls . A sustained rebound from this area could help stabilize prices and open the door to a recovery. However, a drop below $1,036 will invalidate the bullish formation and cause ZEC to experience more downward pressure.
Currently, the technicals are suggesting a wait-and-see approach. It all depends on the ability of ZEC to withstand the demand zone.