Zcash rallies 15% – Yet THESE 2 pressure points still matter

The privacy-focused cryptocurrency Zcash has regained investor attention as fresh capital flows into the market. In fact, the altcoin has climbed roughly 15% in recent sessions, supported by a surge in derivatives activity and renewed bullish positioning. Yet, beneath the surface, the structure of the rally raises questions. More than $108 million in liquidity has exited the market, pointing to underlying weakness that could challenge the sustainability of the uptrend. Derivatives inflows drive price momentum ZEC’s upward move has closely tracked a sharp increase in capital inflows, particularly within the perpetual futures market. According to data from CoinGlass, approximately 21% of total liquidity was held in leveraged ZEC positions, representing around $257 million out of $1.1 billion in Open Interest. At the same time, the OI - Weighted Funding Rate has turned positive. This shift signals that long traders are paying a premium to maintain their positions, a clear indication that bullish sentiment currently dominates the Derivatives market. Such concentrated inflows can accelerate price action, especially when momentum builds in one direction. In this case, leveraged positioning has played a key role in sustaining ZEC’s recent gains. Spot outflows weaken the broader structure While Derivatives traders continue to push prices higher, activity in the Spot market tells a more cautious story. Recent data showed that total liquidations reached approximately $61 million during the rally, with short sellers accounting for around $59 million. This reflects a classic short squeeze, where rising prices force bearish positions to close, further fueling the move upward. However, beyond derivatives-driven momentum, Spot investors have taken the opportunity to exit positions. Over the past 48 hours, Exchange Netflows indicate that roughly $48 million worth of ZEC has been sold across multiple platforms. This divergence between Derivatives Inflows and Spot Outflows highlights a structural imbalance. While leveraged traders continue to bet on further upside, spot market participants appear to be locking in profits. If this selling pressure persists, it could weigh on price action and increase the likelihood of a pullback. Still, as long as bullish momentum remains intact, any decline may unfold as a corrective phase rather than a full reversal. Liquidity zones point to potential downside Market structure also suggests a growing probability of a near-term retracement. Liquidity clusters, which represent areas of concentrated unfilled orders, often act as magnets that draw price toward them. Current positioning indicates that Zcash [ZEC] could revisit the $500–$480 range, the nearest significant liquidity zone below its current level. Beyond this range, liquidity thins out before the next major cluster, which could allow for a sharper move if price breaks lower. However, given the prevailing bullish sentiment, any dip into these zones may attract fresh demand. If buyers step in at these levels, ZEC could recover quickly and attempt to extend its upward trend. Final Summary Zcash’s recent rally has been driven heavily by leveraged futures activity, with nearly $257 million tied to Open Interest positions. If Spot selling continues while leveraged positions remain crowded, ZEC could face a sharper correction triggered by long liquidations.