The start of December has been brutal for privacy, with a dramatic drop in the Zcash price that threatens to erase weeks of progress. The asset plunged 21% in the last 24 hours, testing the most critical support line of its current technical structure. According to analyst Ananda Banerjee, although the immediate outlook seems grim, internal indicators like the RSI suggest a possible hidden bullish divergence that could save the trend.
Technical data is alarming but reveals important nuances. Zcash has extended its weekly losses to nearly 33%, sitting dangerously close to the lower limit of its ascending channel. The $348 level now acts as the last line of defense; a daily close below this figure would invalidate the bullish structure in place since September. If this floor gives way, bears could push the valuation toward zones of $309 and even $230, where demand has historically existed.
However, all is not lost for the bulls. The Relative Strength Index (RSI) has marked lower lows while the price formed higher lows, a classic sign of exhaustion in selling pressure. Simultaneously, the Chaikin Money Flow (CMF), which tracks institutional capital inflow, has started to curl upward, suggesting that “smart money” might be preparing to re-enter the market taking advantage of the current discount.
Will the privacy rally survive the growing correlation with Bitcoin?
For months, the Zcash price benefited from a near-zero correlation with Bitcoin (-0.05 yearly), which allowed it to shine on its own and accumulate gains exceeding 780% in the quarter. Nevertheless, this dynamic changed recently; the correlation turned positive (0.48 in the last seven days), causing the general market correction to drag down the privacy asset heavily.
The implications of losing the current support would be severe. Critical voices like maximalist Max Keiser have already declared the end of the “pump and dump,” predicting an inevitable return to $55. To avoid this catastrophic fate and regain control, buyers must not only defend $348 but also drive an aggressive 63% recovery to reclaim the 0.618 Fibonacci level at $592.
To conclude, the next few sessions will be decisive in validating if the ascending channel structure remains intact. If momentum indicators like the CMF manage to cross the zero line and the correlation with Bitcoin weakens again, we could see a surprise rebound. Traders must watch the daily close closely, as the defense of this technical support will define the course for Zcash for the rest of the year 2025.
