Zcash's price is under downward pressure. The shock surrounding governance has shattered sentiment, and the chart has broken below on short-term timeframes. Downside risks have become clear.

What makes this move unusual is that large holders continue buying aggressively even during the downturn. ZEC price has dropped 25% compared to last week. Price, sentiment, and whale movements are all moving in opposite directions.

Bearish pattern and EMA breakdown suggest a 30% risk zone

Zcash may be hard to spot on the daily chart, but on the 12-hour chart, a clear downward pattern is evident. The price has broken below the neckline of the head and shoulders pattern (around $381), completing the pattern. This breakdown has triggered a bearish signal.

Applying the standard measurement from the head to the neckline suggests a downside target near $253, indicating a potential further drop of over 30% from the current price.

Technical analysis of the token and the latest market insights: For more detailed insights, consider subscribing to the daily newsletter delivered by editor Harsh Nataria. Click here.

This decline did not happen in isolation. Zcash has also broken below the 200-period exponential moving average (EMA) on the 12-hour chart. The EMA, which emphasizes recent price action, reflects trend strength. Losing the 200-EMA level often marks a shift from support to resistance.

At the same time, the 20-period EMA has crossed below the 100-period EMA. This death cross indicates a significant increase in short-term downward pressure. If this cross continues to develop, it could lead to further expansion of the ZEC price decline.

The chart shows a clear downward structure, with the EMA broken and a death cross forming, indicating strong downward pressure.

Sharp drop due to falling sentiment. Whales quietly accumulating.

The main cause of this decline lies in sentiment.

Shocked by governance-related developments, Zcash's positive sentiment plummeted from near 90 to around 5 within just a few days—a drop of over 90%. ZEC is highly sensitive to sentiment changes.

On December 27, Zcash surged sharply alongside a localized sentiment uptick. The price rose from about $511 to $550 within two days—a gain of approximately 8%. In contrast, the current situation is reversed: sentiment has vanished, buying orders have decreased, and the price has entered a downtrend.

However, whales have shown a different movement.

Over the past 7 days, the top 100 Zcash holders increased their holdings by 47.71%, equivalent to approximately 15,000 ZEC. Standard whale wallets also rose by 11.44%, adding about 2,000 ZEC (valued at around $780,000). In total, whales accumulated approximately 17,000 ZEC (about $6 million) during the downturn.

Influencer wallets have also increased their holdings by approximately 20%.

Meanwhile, retail investors are showing the opposite behavior. Deposits into exchanges have increased, indicating that small holders are selling out of fear. As a result, the market has become polarized: long-term investors quietly continue buying, while short-term traders react sharply to the sudden drop in sentiment.

Although whale buying is slowing down the decline, the downward trend itself has not been stopped.

Zcash price is holding steady on expectations supported by the EMA.

Zcash price is currently at a key turning point.

On the downside, $361 is the first key level to watch. A clear break below would strengthen the bearish scenario, potentially extending down to $326 and ultimately reaching the final target near $253.

The $253 range represents the 30% downside target based on the head and shoulders pattern.

On the other hand, the downward structure can still be invalidated, but the conditions are strict. Zcash (ZEC) must once again surpass the 200-period EMA and maintain that level. The last time this level was reclaimed was in early December, when ZEC surged over 40%, forming the left shoulder of the chart pattern.

Above this level, resistance exists near 407,000 JPY, followed by 436,000 JPY and 482,000 JPY. Breaking above these levels would signal stabilization in sentiment and the beginning of a trend recovery.

Currently, Zcash is caught between deteriorating technicals and quiet accumulation. The spark for the decline has already been lit. Whether the recovery is fast enough to repair the lost structure depends on sentiment.