Why does ZEC always stumble at $520 during rebounds: the truth behind funding, technical aspects, and on-chain data

Zcash（ZEC）after experiencing a rapid rebound in late December, is now caught in an awkward situation: the price has fallen from a high of $530 to around $493, encountering strong selling pressure each time it approaches the $520 resistance level. This recurring resistance is not simply a technical issue but the result of a complex interplay of multiple market forces. According to the latest data, ZEC’s current price is $508.92, down 4.84% over the past 7 days and up 49.98% over the past 30 days. The stark contrast between this short-term rally and recent decline reflects the internal contradictions within the market.

Derivatives Liquidation “Ceiling”

From the perspective of the derivatives market, the repeated resistance at $520 for ZEC is fundamentally caused by the recurring liquidation structure. The real-time liquidation heatmap shows a clear pattern: when the price rises from the $485-$495 range, a large number of short positions are liquidated, providing momentum for a rebound. However, as the price approaches $520, the situation reverses—previously accumulated short positions begin to close, and this defensive selling pressure is enough to absorb all upward energy, causing each rebound to stall at the same level.

The essence of this liquidation game is that the leverage structure of market participants in the derivatives market determines the price ceiling and floor. The $520 level repeatedly acts as resistance because, at this point, short covering pressure and long buying interest reach a certain balance. Once this balance is broken, the price either continues to rise beyond this level or quickly falls back to support levels.

On-Chain Fund Outflows and Deep Pressure

More concerning are the pessimistic signals conveyed by on-chain data. According to data sources, over the past 7 days, ZEC experienced net outflows exceeding $100 million, with the 30-day outflow expanding to approximately $710 million. This indicates that despite the rebound in price, holders are continuously reducing their positions.

Stronger evidence comes from whale activity: on January 5, 2026, a large amount of unshielded ZEC (over 200,000 tokens, accounting for 1.2% of circulating supply) was transferred from private pools, followed by whales transferring 74,002 ZEC (worth about $35.75 million) to Binance. In the crypto market, large transfers into exchanges are often interpreted as signals of potential selling. This whale movement coincides with the period when ZEC’s price dropped from $530 to $490, reflecting institutional or large holder pessimism about the future market direction.

In comparison, capital outflows from assets like UNI, FIL, and ADA are significantly smaller, indicating that the privacy coin sector is under independent pressure from regulatory expectations and liquidity concerns.

Technical Signs of Decay

From a technical standpoint, ZEC’s upward momentum is indeed waning. The latest data indicates that the MACD has flattened and begun to turn downward, suggesting that short-term bullish momentum is weakening. The candlestick bodies are narrowing, showing that buyers and sellers are in a tug-of-war rather than a one-sided rally.

The key support level is $495. The data emphasizes that buy orders have repeatedly entered around this zone, making it not only a technical level but also a consensus defensive line among market participants. If this support is broken, downward pressure could quickly intensify, and ZEC may risk retracing to around $450.

The Independent Dilemma of Privacy Coins

It is worth noting that ZEC’s predicament is not only price-related but also sector-wide. Amid the pressure on mainstream altcoins, the privacy coin sector faces even greater challenges. This is closely related to the increasing regulatory focus on privacy transactions. Although there are market expectations regarding the Bitwise ZEC Strategy ETF filing, such institutional innovations have yet to translate into actual price support.

Key Variables for Future Trends

Overall, ZEC remains in a critical trading range of $485-$495 in the short term. If support holds, there is a possibility of testing the $520 resistance again; however, persistent capital outflows and derivatives pressure increase the risk of falling below $475 significantly.

My personal view is that the current market pricing of ZEC is more driven by leverage structures and liquidity dynamics rather than fundamental changes. This means that the price movement largely depends on the behavior of derivatives market participants rather than a renewed valuation of privacy coins themselves. Under this condition, breakthroughs often require external catalysts—such as substantial progress on ETF approvals, clear regulatory stance shifts, or a fundamental change in market sentiment.

Summary

The reasons for ZEC repeatedly being blocked at $520 are multifaceted: structural constraints from derivatives liquidation, ongoing on-chain capital outflows, waning technical momentum, and sector-specific pressures on privacy coins. The current price hovers around $495-$493, and the stability of this support level will determine the subsequent trend. For investors watching ZEC, key points are whether the $495 support can hold and whether new catalysts emerge that can shift market sentiment. Until then, range-bound consolidation remains the most likely scenario.