Zcash avoided a near-term 34% collapse after aggressive dip buyers pushed prices back above the critical breakdown zone near $359 on January 19. The intervention stopped an immediate technical breakdown, but chart patterns and capital-flow data indicate the relief was fragile and contingent on follow-through buying.
On the 12‑hour chart Zcash ZEC had formed a clear head‑and‑shoulders setup that threatened a large decline. Buyers managed to force a recovery before the 12‑hour candle closed below the roughly $359 breakdown level, producing a long lower wick that prevented the pattern’s confirmation.
Momentum provided a thin cushion: the RSI showed a bullish divergence between January 10 and January 19, which commonly signals a short bounce after sharp declines. That signal, however, was described in the analysis as fragile — it depends on ZEC holding above about $335.
A decisive close below the $359–$350 zone would likely reactivate the bearish structure and expose targets near $250, with a deeper projection toward $171 if selling accelerates. Upside tests at about $450 would weaken the pattern; the bearish structure would only be invalidated on a sustained move above $559.
Flows and supply: dip buying, not conviction buying
On‑chain and exchange flow metrics painted a subdued demand picture. Whale holdings rose by about 12.65% over the prior week to roughly 9,950 ZEC, providing the primary support during the selloff, while the largest 100 addresses — the so‑called mega‑whales — refrained from meaningful additions.
Spot exchange outflows, a proxy for conviction-driven accumulation, fell sharply from late‑November peaks near $61m to about $7.68m on January 19 — an 87% decline from prior accumulation highs. The Money Flow Index and recent capital‑flow snapshots showed defensive, post‑weakness buying rather than aggressive, breakout chasing. Net outflows across contract and spot markets in the most recent 24‑hour window reinforced the cautious demand backdrop
Investors and product teams are now watching whether dip buyers can convert defensive stops into conviction: a sustained hold of the $359–$350 band on 12‑hour closes would allow short‑term stabilization, while failure there would likely reopen the path toward the lower targets outlined above. Risk managers and compliance officers should treat any rally as corrective until clear, sustained breaches of the bearish thresholds occur.
