Capital outflows continue to pressure privacy tokens, compounding an already fragile market environment.
Zcash’s ZEC token has not escaped the broader downturn. The altcoin slid 12% as capital flight intensified, amplifying downside risks.
Despite the pullback, the potential for a rebound remains intact, as underlying buy-side interest has yet to fully erode and could support a near-term recovery.
ZEC momentum dries up
Momentum indicators show clear signs of exhaustion, raising the likelihood that Zcash [ZEC] could extend its losses if sentiment continues to deteriorate.
Data from the Moving Average Convergence and Divergence (MACD) indicator shows that bullish momentum is fading, reinforcing the prevailing downside bias.
The MACD histogram, which reflects the strength of price momentum, has gradually shifted from deep green to a lighter shade—evidence that buying pressure has thinned and liquidity has weakened.
Similarly, the Chaikin Money Flow (CMF), which tracks whether volume flows into or out of an asset, indicates that most of the past day’s trading activity has favored the sell side.
Rising sell-side volume, combined with rapidly weakening bullish momentum, has intensified pressure on the asset and contributed to its recent downturn.
Capital flight intensifies
The clearest sign of capital flight has emerged from the perpetual futures market, where traders have pulled significant liquidity.
According to CoinGlass data, approximately $52 million exited ZEC’s perpetual market, with $2.98 million in positions liquidated.
An outflow of this magnitude often sends a shock through the market, signaling heightened fear and risk aversion among derivatives traders.
Total Open Liquidity in ZEC perpetual contracts stood near $400 million. While still sizable, this level does not eliminate the downside risk, particularly as sellers continue to dominate flows.
Perpetual market volume mirrors the trend seen in the spot market. Trading activity has skewed heavily toward the sell side, reinforcing the bearish structure.
The Long/Short Ratio has dropped to 0.923, reflecting stronger short positioning. A ratio below 1 signals that short traders currently outnumber longs, suggesting that participants are positioning for further price declines.
Where the tide could turn
Despite mounting pressure in the derivatives market, sentiment has not completely turned against the bulls.
At press time, the Open Interest Weighted Funding Rate showed that long contracts still hold relative dominance. This suggests that, despite recent turbulence, a significant portion of market liquidity continues to support an upside scenario.
However, this metric has trended lower and is approaching negative territory. A decisive move below zero would signal that shorts have seized control of the derivatives market.
The spot market adds nuance to the outlook. While perpetual traders have reduced exposure, spot investors continue to accumulate. According to CoinGlass, buyers deployed roughly $18 million into ZEC on the 18th of February, strengthening their positions.
If buying pressure persists into the daily close, bulls could regain short-term control. In that case, sustained Spot demand, combined with a still-positive Open Interest Weighted Funding Rate, may improve the probability of a rebound.
Final Summary
- Zcash (ZEC) dropped 12% as $52 million exited its perpetual futures market, with $2.98 million liquidated.
- Despite derivatives’ weakness, Zcash (ZEC) saw roughly $18 million in spot inflows on February 18.
