Zcash (ZEC) Plunges 6%...Profit-Taking After 253% Surge, Even ETF Funds Withdrawn

▲ Zcash (ZEC)/ChatGPT generated image ©

Zcash (ZEC) plummeted after a 253% surge to its September high, due to a combination of profit-taking and deleveraging. Even in a market where Bitcoin (BTC) is rising, ZEC alone showed weakness, and a large amount of funds flowing out of the US Zcash spot ETF has increased short-term adjustment pressure.

According to cryptocurrency market data aggregator CoinMarketCap on October 1 (local time), Zcash traded at $1,324.55, down 5.83% over 24 hours. This trend is in stark contrast to Bitcoin, which rose 1.38% during the same period. ZEC soared approximately 253% from around $480 to a late September high of $1,698, suggesting that profit-taking sell-offs due to the recent sharp rise were concentrated.

Deleveraging was also evident in the derivatives market. ZEC perpetual futures open interest on OKX decreased by 13.5% over 24 hours. This means that as investors closed their leveraged positions, the speculative buying pressure that had driven prices up weakened. The media evaluated this decline not as a sharp drop due to new negative news, but rather as a process of unwinding market overheating after a steep rise.

Weakening institutional demand also added to the burden. Grayscale's Zcash spot ETF (ZCSH) recorded a net outflow of $30.25 million on September 30. This can be interpreted as a sign of weakening demand from institutions and large investors ahead of the month-end. Particularly, given that Bitcoin rose during the same period, the analysis suggests that this ZEC decline was more heavily influenced by Zcash's own profit-taking and ETF fund outflows rather than a general sell-off across the cryptocurrency market.

In the short term, $1,233 is a key support level. If this price level is maintained, there is a possibility of entering a sideways trend after a correction, but if it closes below $1,233 on a daily basis, there is a risk of further decline to the $1,100-$1,150 range. Conversely, if it recovers $1,410.72, it is suggested that the short-term correction will end and the existing upward trend may regain momentum.

The long-term trend has not yet broken down. The 50-day exponential moving average (EMA) is above the 200-day EMA, indicating that a bullish structure is maintained in the broader trend, but short-term momentum has weakened. Key variables that will determine the future direction are the stability of open interest and the defense of the $1,233 support level. Additionally, the US September employment report, to be released on the 2nd, could affect investor sentiment for risk assets, so market attention is expected to be focused.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*