The Zcash price has entered a cooling phase after a massive rally, giving back much of the recent gains over the last month. According to the technical analysis presented by Ananda Banerjee, indicators suggest the market is at a critical crossroads where reclaiming the $404 level is vital for immediate bullish continuity.
Although the token is still up more than 650% on the three-month timeframe, the recent trend has become notably cautious after falling 43%. Momentum indicators are sending mixed signals, where the Chaikin Money Flow (CMF) showed a small bullish divergence between December 11 and December 17, hinting that buying pressure is slowly returning beneath the surface despite the observed price correction.
On the other hand, leverage data helps explain why the move is currently slow. On the seven-day liquidation map, short positions dominate the market with a total of 44 million dollars, while longs sit near 14 million. This shows that short-term traders are still positioned for a continued drop, expecting prices to mark new lows in the upcoming active trading sessions.
However, the picture changes drastically when analyzing the 30-day view. Long and short leverage both stand near 38 million dollars, suggesting a balance of forces where longer-term traders are not leaning heavily bearish. Thus, almost half of the derivatives traders are expecting the price to move up, backing the thesis that the uptrend is not dead, only temporarily delayed.
Is This Pullback a Temporary Pause or the End of the Bullish Trend?
The current price level now acts as the deciding factor tying all technical data together. The most important support is firmly located in the 301 dollar zone, a level that has withstood multiple technical tests and marks the lower boundary of the current structure. As long as Zcash stays above 301 dollars, the broader uptrend remains intact, offering hope to investors looking for a continuation of the rally.
The near-term problem and key control point is the $404 level. Zcash has repeatedly failed to hold above this zone, so a daily close above 404 dollars would be crucial. This would signal that cautious buyers are gaining confidence, potentially allowing a move toward the next major target near 520 dollars, a level that has capped upside since late November.
Can Demand Overcome Current Market Caution and Reactivate the Rise?
Furthermore, On-Balance Volume (OBV) tells a similar cautious story by not showing clear bullish divergences. The indicator continues to move in line with price without breaking its downtrend, implying that while there is accumulation, it lacks aggressive follow-through. This suggests that we are seeing early positioning rather than a full trend shift, requiring patience from market participants before confirming an entry.
Finally, the data points to a delay in the upmove, not a definitive defeat for the asset. If the $404 level remains unclaimed, downside risk stays open. A loss of 301 dollars would expose a risk of a much deeper pullback, invalidating the bullish outlook for this cryptocurrency. Therefore, market conviction will depend entirely on the asset’s ability to reclaim ground and confirm demand strength in the coming days.
