Privacy in the crypto market faces a critical moment following the confirmation of a worrying collapse in Zcash activity. In just three weeks, the asset’s trading volume has dropped from a peak of $1.5 billion in January to a mere $450 million this February 3, 2026. This drastic reduction in liquidity coincides with a 44% drop in its monthly value, placing the price dangerously close to the $200 mark.
Thus, the technical structure of the privacy-focused coin has completed a “head-and-shoulders” pattern, signaling a forceful trend reversal. According to Ananda Banerjee, a financial analyst, trader disinterest is making it easier for the price to slide without finding solid support, this being a scenario that could intensify bearish volatility if capital inflows do not recover immediately.
Capital exodus and rising exchange reserves
Selling pressure is reflected not only in the price but also in the movement of large holders of the cryptocurrency. In the last day, Zcash reserves on exchange platforms have increased by 64%, indicating that investors are moving their funds to liquidate them for fear of further declines. Likewise, the Chaikin Money Flow (CMF) indicator has entered negative territory, confirming that money outflows far outweigh inflows.
On the other hand, although some “smart money” wallets have increased their positions by 9%, this movement is insufficient against the massive sell-off led by the sector’s whales. However, the drop in activity on centralized exchanges complicates any attempt at an organic rebound, which represents a structural challenge for the coin following the mass resignation of the Electric Coin Company development team earlier this year.
Can Zcash reclaim the 289-dollar support to avoid a definitive collapse?
Furthermore, market analysis suggests that if the $262 support level is lost, the technical target of the bearish pattern would inevitably sit at $200. To invalidate this outlook, the asset would need to reclaim the $289 zone with a significant increase in trading volume, something that currently seems unlikely due to the distrust generated by the internal governance conflicts that have recently shaken the project.
Therefore, the short-term outlook for Zcash remains bleak as the market ignores its strategic advances in favor of security. Also, the lack of a clear technical roadmap after the transition to the Zcash Foundation has left the asset in a vulnerable position, where every recovery attempt is used by speculators to close short positions before the downtrend resumes its course toward annual lows.
