Zcash (ZEC) suffered a sharp 20% drop in the last 24 hours. The cryptocurrency settled near $526 this November 11. Despite the initial alarm, this Zcash price correction could be a bullish consolidation, not a reversal. Technical analysis from charts, visible on platforms like TradingView, reveals the formation of a “bull flag” pattern.
The recent pullback appears to be just a pause in a massive rally. ZEC has accumulated an astonishing 1,200% gain in three months and remains up 14% for the past week. The “bull flag” pattern formed after the strong impulse (the flagpole) seen since late October. Now, the price is moving sideways (the flag). Historically, this pattern often resolves with an upward continuation of the main trend.
Furthermore, a key technical indicator reinforces this optimistic thesis. A hidden bullish divergence is visible on the daily chart. Between November 8 and 10, the ZEC price formed higher lows. However, the Relative Strength Index (RSI) registered lower lows during that same period. This suggests that selling pressure is fading. The correction might simply be clearing out “weak hands” before the next push. However, if the newest daily candle closes in the red, this divergence would be invalidated.
Are short sellers about to be liquidated?
On the other hand, derivatives market data hints at an explosive scenario. Liquidation information from platforms like Coinglass shows a significant imbalance in leverage. Currently, $55.4 million in short positions are registered on Binance. This figure is 60% higher than the $35.3 million in long positions.
This accumulation of short positions creates a “short squeeze” risk. A major liquidation zone is located between $529 and $651. If the price of ZEC breaks through this resistance area, it could force short sellers to buy back their positions to cover losses. This would add fresh fuel and momentum to a bullish move.
In summary, analysts are watching for a breakout confirmation above the $612-$688 range. If successful, the next technical upside targets would be activated: $749, $898, and $1,010. The full flagpole projection suggests a 230% potential, which could take the price to $2,030. However, the entire bullish thesis depends on one condition: the price must hold above $488. A drop below that support level would invalidate the bull flag and invite a much deeper correction.
