Zcash (ZEC) has dropped by 6% in the past 24 hours, but continues to be one of the best-performing tokens in the top 10 this year with a 200% gain. According to on-chain data, its privacy feature continues to be in high demand lately.
Trading volumes have retreated a bit in the past 24 hours, dropping to $1.1 billion as ZEC hit a sell wall at $1,700 during the weekend.
However, these volumes still account for over 4% of the asset’s circulating market cap, implying that interest in the token remains strong.
Net Inflows to Zcash’s ETFs Dropped Last Week
Open interest (OI) in Zcash futures neared record levels once again at $3.4 billion last week, as the token continues its seemingly relentless advance toward the $2,000 mark.
However, according to data from SoSoValue, net inflows to exchange-traded funds (ETFs) linked to this altcoin decelerated last week, dropping from $98 million to $35 million for a 64% retreat.
This might be an early signal that this strong rally could be nearing its exhaustion phase, as investors get ready to take millions in profits off the table. Thus far, net assets on Zcash ETFs stand at $1 billion.
To date, the only listed vehicle in the U.S. that offers exposure to this token in the spot market is Grayscale’s ZCSH ETF.
Macroeconomic conditions have taken the back seat when it comes to the market’s priorities and focus, as analysts are in agreement that the Federal Reserve will hike interest rates at least once this year and multiple times in 2027 to curb inflation.
This gives the market a stronger foothold and reduces uncertainty concerning the macroeconomic backdrop. As a result, a bullish phase we have been predicting for months has officially begun.
Shielded Stats Indicate Strong Usage of Zcash’s Privacy Feature
In addition to the market’s overall bullish structure, investors have been focusing primarily on projects with robust use cases — e.g., Hyperliquid (HYPE).
In this regard, Zcash offers a clear practical application, allowing users to mask their identity and execute transactions anonymously via blockchain technology.
Growing usage of this feature is evidenced by a strong climb in the percentage of shielded transactions executed on the Zcash blockchain. According to on-chain data from ZecHub, 56% of the transfers performed last week were shielded. This is the highest percentage on record in the past two years or so.
Rally to $2.2K Seems Likely After a Healthy Pullback
Turning to the daily chart, we can see that another flag pattern has formed in Zcash’s daily chart. This is the third consecutive flag setup that has emerged in this time frame. The last two times, they resolved to the upside and pushed ZEC to make a higher high in just three to five days.
That said, positive momentum has decelerated recently, as the Relative Strength Index (RSI) made a lower high after ZEC’s latest climb — a technical phenomenon called a bearish divergence. This is an early indication that the rally could be entering a phase of exhaustion and calls for caution.
We could expect a pullback to $1,300 – $1,100 at some point, as the market may not have the necessary liquidity to push ZEC to $2K unless an unexpected catalyst pops up. On the other hand, if the rally keeps going, the next stop may be the $2,200 area.
