Zcash holds near $1,300 as NU7 upgrade boosts market sentiment

Key takeaways

• Zcash (ZEC) is trading near $1,300 on Friday, with performance ahead of the broader crypto market.
• Grayscale's ZEC-focused ETF (ZCSH) saw net outflows of $10.99 million on Thursday, bringing the weekly total to $14.77 million.
• ZEC faces immediate resistance at $1,340; a confirmed breakout could open a path to $1,698, while $1,216 and $1,112 remain key support levels.

Zcash (ZEC) stayed firm around $1,300 on Friday, with gains exceeding those of major cryptocurrencies as the broader market struggled to bounce back from a selloff that caused over $1 billion in liquidations the prior day.

The privacy-focused coin was trading near $1,290, supported by expectations around its Network Upgrade 7 (NU7), which is set to activate on Friday.

The upgrade brings notable changes to Zcash's blockchain, such as faster block confirmations, the phasing out of older shielded transaction pools, and a new mechanism designed to support the network's long-term viability.

Institutional investment flows, however, show a different picture. Grayscale's ZEC-focused Exchange-Traded Fund (ETF) saw roughly $11 million in net outflows on Thursday, with weekly withdrawals totaling $14.77 million.

Despite the ETF weakness, derivatives market activity has picked up, with Zcash futures Open Interest climbing to 2.15 million ZEC.

From a technical perspective, ZEC must clear resistance at $1,340 to reinforce its bullish case and potentially extend its recovery toward $1,698.

Zcash defies crypto market selloff ahead of NU7 upgrade

Zcash has shown relative strength even as cryptocurrency markets experienced a broad decline.

The wider selloff triggered over $1 billion in derivatives liquidations on Thursday as investors cut back on risk-sensitive assets.

Bitcoin, Ethereum, and several major altcoins posted significant losses, reflecting heightened market uncertainty.

ZEC, however, continued trading around the psychological $1,300 mark. This resilience comes amid growing attention on the network's NU7 upgrade.

Scheduled for activation at block height 3,543,405, the upgrade brings several technical changes aimed at improving network efficiency and sustainability.

The upcoming activation has provided a potential catalyst for traders seeking opportunities beyond the broader market downturn.

Institutional demand for Zcash investment products has weakened despite the token's relative price strength.

According to SoSoValue, Grayscale's ZEC-focused ETF, trading under the ticker ZCSH, recorded $10.99 million in net outflows on Thursday.

The withdrawals pushed the fund's cumulative weekly net outflows to $14.77 million. The latest figures suggest that ETF investors have been reducing their Zcash exposure.

Zcash technical analysis: $1,340 resistance holds the key

Zcash's daily chart shows the cryptocurrency consolidating below an important horizontal resistance level.

At roughly $1,290, ZEC remains below the $1,340 barrier established by the October 8 high. That level has become a key hurdle for buyers trying to extend the recent recovery.

A decisive daily close above $1,340 could signal a bullish breakout from the current consolidation range. Such a move might attract additional buying interest and shift focus toward the September 26 peak at $1,698.

The bullish scenario, however, depends on a confirmed breakout and sustained buying momentum. Failure to clear $1,340 could keep ZEC within its existing trading range.

The lower boundary of that range is near $1,112, matching the October 8 low.

Despite the resistance above, Zcash's broader technical picture remains constructive.

The cryptocurrency trades above its 50-day Exponential Moving Average (EMA), currently around $1,216.

The 50-day EMA also remains well above the 200-day EMA at about $856. This alignment suggests the underlying trend still favors buyers, even as the token consolidates.

Momentum indicators provide additional support for the bullish outlook. The daily Relative Strength Index (RSI) stands near 53, above the neutral 50 threshold.

Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is above its signal line, suggesting that bullish momentum remains intact.

Together, these indicators suggest ZEC retains the potential for another upward move if buyers succeed in overcoming the $1,340 resistance level.

Zcash's next significant price move may depend on whether buyers can push the cryptocurrency above $1,340.

A sustained breakout could open the door toward $1,698, the previous peak recorded on September 26.

However, if ZEC fails to reclaim $1,340, traders may turn their attention to nearby support levels. The first key downside level is the 50-day EMA around $1,216.

A sustained decline below $1,216 would weaken the near-term bullish outlook. The next major support would appear at $1,112, the lower boundary of the current consolidation range.

A breakdown below that level could signal a more significant deterioration in market structure.

For now, ZEC remains in a relatively constructive position above its major moving averages, although resistance at $1,340 continues to limit upside momentum.