Zcash (ZEC) continued its recovery on Friday, climbing past the $240 mark as the wider crypto market stabilized following a volatile week. The privacy coin has surged over 31% from its daily low of $185. However, analysts warn of potential headwinds due to ongoing weakness in the derivatives sector.
The current rally faces risks from low retail engagement. While ZEC’s price is rising, futures Open Interest (OI) dropped to $335 million on Friday, down from $396 million the day prior. This downward trend in OI—which peaked at $1.38 billion in November—suggests a lack of market conviction. For a sustained bullish move toward the $300 resistance zone, ZEC likely needs to see a simultaneous rise in both price and Open Interest.
According to CoinGlass data, liquidation pressure has significantly cooled off following ZEC’s price rebound. On Friday, liquidations were relatively balanced, with approximately $3.2 million in long positions and $2.4 million in shorts being wiped out. This is a sharp contrast to Thursday’s heavy volatility, which saw $9.5 million in longs liquidated. As ZEC continues its upward trajectory, the reduced pressure on long positions is expected to provide a more stable foundation for the ongoing recovery
Zcash is currently trading above $240, fueled by growing intraday momentum. This bounce-back follows a period of intense selling pressure where ZEC plummeted more than 40% within a week and 65% since the start of the year.
Technically, the Daily Relative Strength Index (RSI) is climbing toward 32, signaling that the aggressive bearish trend is starting to lose steam. Should the RSI continue to move toward the 50-level (midline), it would likely confirm a transition from a bearish regime into a new bullish cycle.
To solidify a bullish reversal, Zcash needs to clear two major hurdles: the 200-day Exponential Moving Average (EMA) at $302 and the upper descending trendline. While momentum is shifting, the MACD still lingers below the signal line, suggesting traders should remain cautious. However, if the negative histogram bars begin to shrink, it would indicate a growing appetite for risk, potentially clearing an upward path.
In terms of support, the $230–$240 range is expected to act as a buffer against selling pressure from short-term profit-takers. Without a decisive move to reclaim the 200-day EMA as a support floor, the $185 demand zone remains a potential target if the rally falters.