Key Takeaways
Why did Zcash [ZEC] rally?
Spot wallets absorbed $990k, while Open Interest climbed 38% to $19.3m with positive Funding Rates fueling bullish leverage.
What signals define ZEC’s outlook?
MFI at 47.45 and Aroon Down at 85% flagged bearish momentum, leaving ZEC’s direction dependent on liquidity clusters around $52–55.
Zcash [ZEC] ranked fourth on CoinMarketCap’s top gainers list after an 11% rally. Astar [ASTR] led the board with a 23% rise during the same period.
Community sentiment showed 82% of investors remained bullish. Still, technicals hinted the rally might not hold.
ZEC locked in
Over the past 24 hours, investors committed millions into ZEC, pushing the token to a fresh market high.
Spot investors contributed by moving $990,000 worth of ZEC from centralized exchanges into private wallets, fueling a potential supply squeeze.
Yet, the impact from these investors pales in comparison to perpetual market participants.
Source: CoinGlass
By contrast, Derivatives activity outweighed spot flows. CoinGlass reported that perpetual investors’ Open Interest climbed to $19.30 million in the past day, marking a 38% increase.
Notably, Open Interest reflects the amount of unsettled liquidity in the Derivatives market. A sharp rise signals that more ZEC contracts were opened during the period.
The Open Interest Weighted Funding Rate, which determines whether this liquidity build-up is bullish or bearish, showed that the inflow came from traders anticipating a bullish run.
Bearish signs flash on charts
Despite the strong data from exchanges, technical indicators painted a different picture.
The Money Flow Index (MFI), which gauges whether an asset is bullish or bearish based on liquidity movements, indicated bearish conditions.
A bearish outlook on the MFI occurs when readings fall below 50. At press time, ZEC stood at 47.50, implying outflows exceeded inflows.
Source: TradingView
Similarly, the Aroon Indicator, which measures trend strength based on the Aroon Up and Aroon Down lines, also showed bearish momentum.
When the Aroon Down (blue) is higher than the Aroon Up (orange), it suggests investors are selling more than buying—a situation reflected in ZEC. The Aroon Down registered 85% while the Aroon Up stood at 21%.
No balance in the market
The Liquidation Heatmap highlighted liquidity pockets clustered above and below $54. This setup left ZEC exposed to sharp swings either way.
Source: CoinGlass
If bulls gain dominance, ZEC could rally upward, clearing liquidity clusters above. Conversely, if bearish momentum strengthens, ZEC may drop lower before any possible reversal.
For now, ZEC’s outlook hinges on which side of the market gains dominance, ultimately determining its direction.
