Zcash is testing key support after a steep decline, with chart signals and trader activity pointing to a possible near-term recovery path.
Zcash has lost a large chunk of its latest rally, yet recent sessions show that traders are not giving up on the token.
The drop removed more than a quarter of its value, even though selling pressure has slowed. As of writing, the charts show a tight range forming which often hints at a trend toward accumulation when traders start to test major support levels.
Zcash Approaches a Possible Turning Point
ZEC has spent the past week among the weakest tokens by performance. Heavy selling pushed the price lower day after day, yet a slight change appeared as candles shortened and volume thinned.
That change often indicates easing pressure from sellers. A narrowing range also formed, creating a zone that traders often watch for signs of recovery.
The token now trades close to several areas that previously caused strong reactions. Prices near these zones tend to draw both buyers and sellers as each group tries to take control.
This pull and push often affects the next short-term direction for assets that have just faced heavy losses.
Technical Signs That Indicate Exhaustion
Several readings on the chart now show that the drop may be tiring out. The size of the candles during the slide has also shrunk. Volume also fell during late sessions, and these two changes often indicate that sellers are becoming less aggressive.
Buyers defended the $330 area for two days straight. That level aligns with past interest on the chart, which makes it an area that traders revisit.
ZEC also moved below the 0.5 Fibonacci retracement level from its yearly highs and drifted toward the 0.382 level near $302.
The RSI drained for weeks and now sits near a level that sometimes aligns with a trend change.
All of this being said, a daolu close above $340 would support the case for a bounce. That has happened, with ZEC now trading at $343. All that the bulls need now, is for the asset to escape its current consolidation band and continue further upwards.
Related Reading: Zcash Drops Despite Landmark Step Toward First ZEC ETF
Short-Term Scenarios for the Next 24 Hours
Traders are eyeing two clear paths in the near term based on nearby levels.
For the bullish case, if buyers guard the $330 zone and then push the price above $385, a short-term rise could follow. If trading volume grows during such a move, ZEC may push toward $400 and attempt to test the $525 to $545 range.
Such a move would confirm that the token has moved out of its tight range and into early recovery.
On the other hand, a break below $330 to $345 would expose the chart to a retest of $300. That area carries weight among traders due to past reactions. If the level fails, sellers might press the price toward $270 or even lower.
In all, a strong bounce from the $300 zone, supported by improved volume could begin the path toward recovery.
A large part of the next move will come from how the token behaves near the $330 and $300 zones.
