ZEC Surges Near $400 as Technical Indicators Warn of Looming Correction

Zcash (ZEC) has surged to near $400, diverging sharply from broader cryptocurrency markets, as technical indicators and on-chain activity suggest a potential correction amid waning momentum. The privacy-focused token has outperformed Bitcoin and Ethereum, rising over 970% in a year, but analysts warn that bearish divergences in key metrics could signal a near-term pullback.

ZEC's price action has formed a rising wedge pattern on the daily chart, a technical formation often preceding bearish reversals after extended uptrends, according to a Cointelegraph report. The wedge's upper boundary currently aligns with $450, suggesting ZEC could test this level before reversing. However, declining RSI readings (currently at 74) and falling trading volumes indicate weakening buying strength, the Cointelegraph report noted. On-chain data further reinforces caution: retail activity has spiked, a trend historically linked to short-term market tops, according to an FXStreet forecast. Ki Young Ju, CEO of CryptoQuant, noted ZEC appears in a distribution phase, cautioning that current buyers are likely "retail" investors entering a profit-taking period, the FXStreet piece added.

Bearish divergences between ZEC's price and its Relative Strength Index (RSI) have also emerged. While the price hit higher highs in early October, the RSI formed lower highs, a classic sign of momentum exhaustion, the FXStreet analysis observed. Similar signals were observed in the Chaikin Money Flow (CMF) indicator, which showed weakening inflows despite rising prices, according to a BeInCrypto analysis. These patterns suggest ZEC could face a 10%–12% pullback to retest support levels near $314 or $284, the BeInCrypto piece warned.

Electric Coin Co. (ECC), the firm behind ZEC, has outlined ambitious Q4 2025 plans to enhance privacy features and reduce technical debt. The roadmap includes multisig wallet integrations, ephemeral addresses for swaps, and improved shielded supply management. These upgrades aim to bolster ZEC's appeal as a privacy-centric store of value, with its shielded supply already rising alongside the price rally.

Market sentiment remains mixed. While ZEC's bullish trend has held despite broader crypto volatility, an FXStreet wrap noted continuing market headwinds. Some analysts argue the token's fundamentals—such as its 0.33% market share of Bitcoin's cap—suggest it remains undervalued, according to a Crypto.news report. However, recent on-chain activity and technical indicators point to a possible near-term correction. If ZEC breaks below the wedge's lower trendline, it could target the $260–$270 range, aligning with the 20-day EMA, the Cointelegraph piece suggested.

ZEC's next move will hinge on institutional adoption and macroeconomic factors. The Federal Reserve's recent rate cut has pressured crypto markets broadly, the FXStreet wrap observed, but ZEC's resilience suggests strong retail demand. A break above $400 could reignite bullish momentum, targeting the wedge's apex near $450, the Cointelegraph report noted. Conversely, a sustained drop below $314 could invalidate the current uptrend, triggering deeper corrections.

As ECC rolls out privacy upgrades and the market digests these developments, ZEC's trajectory will remain a key barometer for altcoin sentiment in a fragmented crypto landscape.