Zcash Price Forecast: ZEC defies crypto market sell-off as NU7 upgrade fuels breakout hopes

Zcash (ZEC) shows resilience above $1,300 on Friday, defying the broader cryptocurrency market sell-off, which saw over $1 billion in liquidations the previous day. This strength aligns with Network Upgrade 7 (NU7), scheduled for Friday, which enables faster payments and disables older transaction pools.

Grayscale’s ZEC-focused Exchange-Traded Fund (ETF) recorded nearly $11 million in outflows on Thursday, suggesting selling pressure from institutional investors, while its elevated Open Interest points to a firm buildup in leveraged positions. Technically, Zcash must confirm a breakout above the $1,340 horizontal barrier to reinstate a bullish trend.

Zcash derivatives demand offsets ETF outflows ahead of the Network Upgrade

Zcash holds firm demand in the derivatives market despite jitters in the daily ETF flows. SoSoValue data shows Grayscale’s ZEC-focused ETF (ZCSH) recorded $10.99 million in outflows on Thursday, bringing the total weekly net outflow to $14.77 million so far. These negative flows suggest that investors are redeeming their ETF shares, suggesting reduced demand for crypto amid broader market uncertainty. 

A negative or mildly positive flow on Friday could break ZCSH’s streak of two positive weekly inflows, weighing on the privacy coin’s medium- to long-term outlook. 

However, the derivatives market data shows growing appeal for Zcash among traders. According to CoinGlass, Zcash Open Interest (OI) has risen to 2.15 million ZEC, up from 2.05 million the previous day, indicating that the positional buildup is back to elevated levels after a mild contraction which coincided with the $1 billion liquidation day. 

Zcash’s appeal in the leverage market aligns with the NU7 upgrade scheduled for Friday, with activation set at block height 3,543,405. The upgrade will reduce block confirmation time from 75 seconds to 25 seconds, enabling 3x faster payments. It will also disable older v4 Sprout-shielded transaction pools to strengthen network security and implement a Network Sustainability Mechanism (NSM) to temporarily redirect 60% of transaction fees from circulation into a long-term NSM Value Balance, aimed at sustaining miner rewards as the base subsidy halves over time.

Technical outlook: Will Zcash trigger a bullish breakout move?

Zcash trades at $1,308 at press time on Friday, testing the overhead barrier around $1,340 set by the October 8 high. From a technical perspective, the privacy coin is in a consolidation range, with the October 8 low around $1,112 serving as the support floor.

Still, ZEC holds above the 50-day Exponential Moving Average (EMA) at $1,216, which sits well above the 200-day EMA at $856, suggesting a supportive underlying trend structure and near-term constructive bias. A confirmed breakout above $1,340 could pave the path toward the $1,698 peak from September 26, implying an upside potential of over 25%.

Momentum conditions are mildly positive on the daily chart, with the Relative Strength Index (RSI) around 55 and the Moving Average Convergence Divergence (MACD) above its signal line, suggesting that bullish pressure remains in play.

On the downside, initial support is at the 50-day EMA near $1,216, which is holding the latest leg higher and would be the first notable level to be tested on any pullback. A deeper retreat would expose the $1,112 support floor.

(The technical analysis of this story was written with the help of an AI tool. Know more.)