Zcash's 10% Correction Tests Conviction — Is The Rally Still In Play?

Zcash entered 2026 riding one of the market’s most impressive rallies, posting roughly 53% gains in 30 days and an eye-catching 780% year-over-year jump. Yet the recent pullback — a sharp 10% dip over late December — left some wondering if the uptrend had stalled. The reality? The structure remains remarkably intact, and fresh buyer interest is already stepping in to challenge the bears.

The Dip Was Profit-Taking, Not Trend Collapse

ZEC has been trading within an ascending channel where each new peak sits higher than the last, and support zones climb steadily upward. On December 29, the upper trendline pushed price back, triggering a temporary loss of momentum. What followed was a near 10% decline that stretched into the final days of the year — but this wasn’t a sign of weakness. It was textbook profit-taking.

Exchange data tells the story. On December 29, spot inflows hit $38.22 million, with another $7.88 million flowing in on December 30. Those green bars represent sellers booking gains. However, the narrative flipped by year-end. December 31 brought $16.63 million in outflows — a clear signal that smart money was returning and accumulating on the dip rather than bailing out.

The Money Flow Index (MFI) reinforces this reading. While price fell between December 29-31, the MFI climbed higher. That’s a bullish divergence: it means money was actually entering the asset despite the price decline. Dip buyers used the weakness to accumulate, offsetting the profit-booking pressure and keeping the breakout structure alive.

Support Holding Strong, But Caution Remains

The lower boundary of the ascending channel sits near $500. As long as Zcash holds this level (with a complete daily close above it), the bullish frame doesn’t break. Keep watching the MFI to confirm it continues higher — that’s your confirmation that buyers remain in control and spot flows remain buyer-aligned.

Next Milestones: What To Watch

The immediate hurdle is a daily close above $559. A clean break there — requiring roughly an 8% surge from recent levels — would confirm renewed strength and reset bullish momentum.

Beyond that lies the critical breakout zone between $596 and $626. This band is where the real fireworks could happen. If price clears this resistance, the measured targets open up: $657 first, followed by $699. Clearing that zone keeps the full channel breakout potential intact, which would represent an 84%+ move from the lower support.

Currently trading around $397.76 with recent data showing some headwinds (30-day change at -13.91%), ZEC has room to recover if buyers can reclaim these key levels. The 1-year performance remains stellar at +721.62%, underscoring the longer-term strength beneath the short-term noise.

The Risk Level Nobody Should Ignore

There’s one level where conviction breaks: $500. A confirmed daily close below that point would flip sentiment sharply. The real test would then fall on the lower trendline of the channel itself — whether it holds or gives way. Until that happens, the weight of evidence points toward buyers maintaining control.

The profit-taking that sparked recent volatility wasn’t a rejection of the rally — it was a pause. And pauses are where smart positioning happens.