Zcash rises 6% in two days, faces resistance at $1,320 after Grayscale outflows

Zcash (ZEC) gained 2% on Wednesday, extending the previous day’s 4% rally and recovering much of Monday’s losses. The privacy-focused cryptocurrency traded near $1,264 as buyers attempted to surpass nearby resistance levels, yet persistent outflows from Grayscale’s ZCSH fund continued to create uncertainty for demand.

Ongoing withdrawals from Grayscale’s ZCSH fund

Grayscale, a major digital asset management company known for its crypto investment products, recorded $5.19 million in net outflows from its ZCSH fund on Tuesday. The fund, which offers institutional exposure to Zcash, also saw $1.66 million withdrawn on Monday and a total of $30.72 million in redemptions over the previous week. This brings net withdrawals for the opening two days of the week to $6.85 million.

The selling pressure has persisted since late September, following Grayscale’s three-for-one share split in the ZCSH fund on September 30. While the timing of the split coincides with increased redemptions, there is no direct evidence linking the two events.

These figures indicate that, despite the recent rebound in ZEC’s spot price, institutional investors have not increased their exposure through the fund. Redemptions remain a challenge as traders monitor whether the latest advance in price can evolve into a longer-term recovery.

For a turnaround in institutional demand, a reduction in fund outflows or a return to net positive inflows would offer clearer confirmation of renewed interest alongside rising price momentum.

Persistent redemptions from Grayscale’s ZCSH fund highlight ongoing caution among institutional investors, which continues to affect the market’s demand outlook for Zcash.

Mini dictionary: Grayscale is a leading digital asset management company that offers investment products allowing institutional and accredited investors exposure to cryptocurrencies such as Bitcoin, Ethereum, and Zcash without direct ownership.

Technical outlook for Zcash: Key resistance at $1,320

ZEC has rebounded from Tuesday’s low near $1,123 and is now testing its 50-period and 200-period exponential moving averages on the four-hour chart. These averages are positioned at approximately $1,261 and $1,269, respectively. With ZEC trading at $1,264, the token sits above the shorter-term average but remains just below the longer-term threshold.

A confirmed break above this moving-average band could bolster the bullish recovery in the near term. Conversely, failure to hold this zone leaves ZEC vulnerable to renewed selling pressure. Stronger validation of the recovery would require ZEC to surpass and establish support above $1,320, which marks Monday’s local high.

If ZEC manages to clear $1,320, analysts identify $1,422—September 18’s low—as the next major resistance. However, if momentum fades, support may be found at Thursday’s low near $1,115, with additional support at $1,050 (the September 4 high) and the psychological $1,000 mark.

Momentum indicators present a mixed picture: the Relative Strength Index stands at 48, slightly below its neutral midpoint, while the Moving Average Convergence Divergence metric is marginally bullish.

The technical structure for Zcash remains uncertain, with immediate outlooks tied closely to whether buyers can sustain momentum above the moving-average zone and break through $1,320 resistance.

Mini dictionary: The Relative Strength Index (RSI) is a technical indicator measuring the speed and change of price movements to assess whether a cryptocurrency is overbought or oversold. The Moving Average Convergence Divergence (MACD) is another technical tool used to identify trend direction and potential momentum shifts by comparing two moving averages of a security’s price.

Zcash’s near-term direction depends on buyers’ ability to sustain momentum and overcome resistance. A breakout above $1,320 would reinforce the recovery, while failure could expose support zones below.