Zcash [ZEC] experienced a sharp correction after its recent rally pushed the cryptocurrency toward the $1,300 price region. At the time of reporting, ZEC had dropped 14.36% over 24 hours, reversing part of its prior gains during an extended uptrend.
The decline stemmed from a significant leverage unwind in the market. According to reports, ZEC's rally had attracted substantial speculative activity, with Open Interest reaching $1.35 billion. When the price retreated from its highs, this elevated leverage exposed bullish traders to forced position closures.
Two leveraged ZEC long positions were fully liquidated as the token declined, with combined losses totaling around $4.33 million. Long liquidations typically accelerate price declines because automated systems close these positions when traders cannot maintain sufficient collateral, creating additional selling pressure.
The correction occurred amid broader weakness in risk assets, including selling pressure on Bitcoin. Technical indicators had also signaled stretched conditions before the reversal, with the daily RSI moving above the 75 level, indicating overbought conditions that made profit-taking likely as ZEC approached $1,300.
Technical Outlook
Zcash swept liquidity around $1,300 before failing to sustain moves above the $1,245 resistance zone. The correction drove the price toward a fair value gap between $1,075 and $1,100, where buyers are attempting to respond. Price has since rebounded toward the $1,099 area.
The RSI has cooled to 63.85 from its overbought readings, while remaining above neutral territory. The directional indicators show the +DI at 35.68 above the -DI at 11.80, preserving a broader bullish structure. The ADX remains elevated around 56.84, indicating the prevailing trend retains substantial strength.
Key Support and Resistance Levels
A strong hold of the $1,075 support could encourage a recovery move toward the $1,245 resistance, with potential for another attempt at the $1,295 liquidity region. A breakdown below $1,075 would instead expose lower fair value gap support around $970 and the $800 order block.
Liquidation heatmap data highlights dense liquidity concentrations around the $1,180–$1,200 price zone, which could act as an upside magnet if ZEC extends its rebound. Significant downside liquidity also clusters around $1,050.
Ultimately, whether Zcash can defend the $1,075 support level will determine if a recovery toward the overhead liquidity zones becomes viable.
