Zcash (ZEC) has undergone a sharp correction that some analysts interpret as the completion of a bullish pattern — potentially setting up the next leg higher. However, underlying technical and on-chain signals suggest the path forward may be precarious. While the chart structure appears constructive, traders should remain alert to possible traps and trend reversals.
The recent pullback in ZEC is being viewed as a “reset” within a broader bullish formation. The correction allowed the price to retest key support levels and flush out weaker hands, which is characteristic of healthy trend structures. According to technical watchers, a bullish pattern now stands confirmed, creating potential upside targets if momentum returns.
Yet, several warning signs complicate the outlook. The Chaikin Money Flow (CMF) indicator is showing declining peaks, suggesting that capital inflows — especially from larger holders — may be weakening. Meanwhile, derivatives markets are heavily skewed: long leverage positions dominate short ones, making ZEC vulnerable to a long squeeze if sentiment shifts.
Pattern completion amid mixed signals
On the 12‑hour chart, price is trading near the upper boundary of a rising wedge or ascending structure, a pattern that often ends in reversal if it fails to break decisively upward. A confirmed breakdown below the key support zone around $151 could trigger a reversal bath, with some models projecting a potential decline toward $120 (~30 % drop).
On the other hand, to invalidate the bearish thesis, ZEC would need a strong breakout above the upper resistance, with some eyes on levels around $222 and beyond.
In sum, while the chart may show a completed bullish structure, momentum and capital flow indicators counsel caution. The setup can work to the upside if buying pressure returns — but a failure to sustain strength could turn the pattern into a trap for bullish traders.
