Zcash Faces Mounting Pressure as Whales Dump 38% of Holdings in One Week

Privacy-focused cryptocurrency Zcash has entered turbulent waters as large holders shed approximately 38% of their positions over the past seven days, raising red flags about the token's near-term trajectory despite a modest weekly gain.

Sharp Decline Amid Broader Market Weakness

Zcash experienced a 7% price drop in the past 24 hours, mirroring weakness across the broader cryptocurrency market. While the privacy coin posted a 5.8% gain over the past week according to CoinGecko data, the monthly performance paints a grimmer picture with a decline exceeding 40% month-over-month.

Bitcoin and Ethereum registered even steeper losses during the same timeframe as the cryptocurrency market selloff intensified.

Whale Activity Signals Trouble Ahead

Exchange flow data revealed net outflows on February 12, typically interpreted as a bullish signal indicating buying activity. However, on-chain analytics tell a different story—large holders have been systematically reducing their Zcash positions, with the selloff accelerating over the past 24 hours.

Simultaneously, exchange inflows have increased, suggesting that coins are being transferred from private wallets to trading platforms in preparation for sale. This pattern of distribution by sophisticated investors has market analysts questioning the sustainability of current price levels.

Bearish Technical Signals Mount

Technical analysts have identified a bearish flag and pole pattern developing on Zcash price charts. This formation typically emerges after a sharp price decline followed by a consolidation phase. According to technical analysis methodology, when prices break down from this pattern, the subsequent decline often mirrors the distance of the initial drop.

For Zcash, this measured move suggests a potential 66% decline from current levels if the pattern reaches completion.

Adding to the technical concerns, a four-month bearish divergence has formed between October and February. During this period, Zcash prices achieved a higher high while the Relative Strength Index (RSI)—a key momentum indicator—recorded a lower high. This divergence typically signals weakening buying pressure despite rising prices.

The RSI continues its downward trajectory even as prices hover near recent highs, creating an expanding gap between price action and underlying momentum indicators.

Concentration Risk Creates Instability

On-chain data reveals that the top 100 addresses control approximately 70% of Zcash's total supply, highlighting significant concentration risk. Blockchain analytics indicate that smart money indicators have remained flat with no meaningful accumulation detected among sophisticated investors.

This high concentration level, combined with recent distribution by large holders, has created what analysts describe as a potentially unstable foundation for maintaining current price levels.

Zcash (ZEC) chart last 30 Days

What Comes Next?

The cryptocurrency has rebounded from lows reached in early February, but technical analysts emphasize that a breakout above resistance levels would be necessary to invalidate the bearish setup currently in place. Conversely, a breakdown below key support zones would likely accelerate downside momentum.

Market observers have noted an unusual dynamic where Zcash has shown relative outperformance compared to other cryptocurrencies even as large holders actively distribute their positions—a pattern that raises questions about the sustainability of recent price action.

Coinasity's Take

The confluence of technical and on-chain warning signs surrounding Zcash creates a compelling bearish case that investors cannot ignore. The 38% reduction in whale holdings over just seven days represents a clear vote of no confidence from the market's most informed participants. Combined with severe supply concentration and deteriorating technical indicators, Zcash faces significant headwinds. Until we see genuine accumulation by large holders and technical confirmation through a resistance breakout, the path of least resistance appears to be lower.