Zcash falls nearly 30% from September high amid prolonged crypto selloff

Fundamental perspective

Zcash has faced substantial selling in recent days, though no major negative event specific to the cryptocurrency triggered the decline. Instead, a wider crypto market downturn occurred as rising oil prices, Treasury yields, and a stronger US dollar weighed on risk assets.

Regarding Zcash-specific updates, some positive news emerged during the selloff. On October 6, Winklevoss Asset Services submitted an S-1 registration for a proposed spot Zcash ETF that would directly hold ZEC, while Winklevoss Capital expressed non-binding interest in buying up to $100 million of shares. This filing introduces another potential catalyst for institutional demand, building on Grayscale's current Zcash ETF.

Another key catalyst is NU7, Zcash's forthcoming network upgrade. The upgrade launched on the public testnet this week, cutting target block times from 75 seconds to 25 seconds and adding a Network Sustainability Mechanism. Developers aim for mainnet activation on November 5, with a final decision on activation expected by October 20. Positive testing outcomes would bolster Zcash's fundamental story, whereas technical issues or delays could harm it.

Thus, the present weakness appears driven more by macroeconomic pressures and a pullback after a very strong rally than by a worsening of Zcash's fundamental narrative. The main near-term catalysts are the October 20 NU7 activation decision, the possible launch process for the Winklevoss ETF, and the November 5 mainnet upgrade.

Nevertheless, ZEC is still very sensitive to overall crypto liquidity, so ongoing pressure from oil, yields, and the dollar may continue to outweigh these specific catalysts in the near term.

Zcash technical analysis – daily timeframe

On the daily chart, Zcash fell below the key upward trendline and extended its decline as sellers piled in, targeting a drop to the 1,031 level. If that level is reached, buyers are expected to enter with a defined risk below it, positioning for a rally to 2,000. Sellers, meanwhile, will aim for a break below to push further down to the 800.00 level.

Zcash technical analysis – 4 hour timeframe

On the 4-hour chart, a downward trendline now defines the bearish momentum. A pullback to that trendline would likely see sellers take action with a defined risk above it, aiming to push the price to 1,031. Buyers, however, will look for a break above to enter for a rally to new highs, with 1,500 as the initial target.

Zcash technical analysis – 1 hour timeframe

On the 1-hour chart, there is little to add; sellers have a better risk-reward setup near the downward trendline, where there is also a support zone around 1,280. Buyers will need to wait for a drop to 1,031 or a break above the trendline to begin positioning for new highs. The red lines indicate the average daily range for today.

Upcoming catalysts

The latest US Jobless Claims figures are due today. The week concludes tomorrow with the University of Michigan Consumer Sentiment survey. However, attention will stay on US-Iran developments.