Zcash Slips Into a 30% Breakdown Zone: What Went Wrong with ZEC?

Zcash (ZEC) has entered a 30% breakdown zone, marking a significant decline from recent levels. The drop followed a governance shock, as the core development team resigned, triggering panic selling. Price fell nearly 20% in a single day, briefly dipping near $380.

The market reaction was swift, with a sharp drop in positive sentiment from nearly 90 to 5 in a matter of days. This decline in optimism led to weaker buying pressure and thinner bid levels. The breakdown triggered a head-and-shoulders pattern on the 12-hour chart, with the price falling below the neckline near $381.

Large holders, however, responded differently. Over the past week, top 100 Zcash holders increased their balances by 47.71%, adding roughly 15,000 ZEC to their portfolios. Standard whale wallets also added holdings, accumulating nearly 2,000 ZEC. Combined, this totals over 17,000 ZEC, or about $6 million worth of ZEC, during the sell-off.

Why Did This Happen?

The trigger for the breakdown was the resignation of the entire Electric Coin Company (ECC) team. This was not due to a technical issue but a governance dispute. The ECC team cited employment changes that compromised their integrity, leading to their decision. The news led to immediate uncertainty among investors, triggering the sell-off.

Zcash's development activity has also been declining, with the development score falling from 21.85 in late December to around 19.67. This decline has been ongoing and predates the governance announcement. Historically, Zcash has seen its strongest rallies during periods of rising development activity.

How Did Markets Respond?

Following the governance shock, Zcash's price fell sharply. The 20-period EMA rolled below the 100-period EMA, indicating weakening short-term momentum. The 200-period EMA also broke below the price, signaling a shift from support to resistance.

The market remains split between short-term sellers and long-term buyers. While retail investors are pulling back and moving ZEC to exchanges, whales are accumulating quietly. Whale behavior shows that large holders see value in the current price and are buying during the dip.

What Are Analysts Watching Next?

Analysts are closely monitoring key price levels and technical indicators. A break below $361 would reinforce the bearish case and expose the $326 level. If Zcash can reclaim and hold above the 200-period EMA, it could signal a recovery. The last time this happened, in early December, ZEC rallied over 40%.

On-chain data also remains a focus. Zcash's shielded pool, which holds roughly 4.87 million ZEC, has seen little new inflow. This suggests fluctuating user demand, potentially impacting the price.

The market is also watching for any signs of renewed development activity. A return of innovation could help stabilize the price and restore investor confidence. For now, Zcash remains at a decision point, with the next move depending on whether development momentum and price structure can realign.