Zcash price is grappling with heavy bearish pressure as it has dropped over 30% since the start of the year, as investors reacted to a mass resignation within the core development team. Now, renewed whale selling is positioning the token for more downside.

According to data from crypto.news, Zcash (ZEC) has dropped 10% in the past 7 days to $364 at last check Friday, Jan. 23. This brings it nearly 31.7% below this month’s high of $533 recorded on Jan. 1.

The primary cause of this downtrend has been investor concerns over Zcash’s roadmap ahead after the entire development team at the Electric Coin Company (ECC), which developed Zcash, resigned following a dispute with their overseeing non-profit board, Bootstrap.

While former ECC chief executive officer Josh Swihart noted at that time that the team remains committed to Zcash through a new independent entity, investor appetite for the token took a hit nevertheless.

Whale selling has been another factor that is preventing price recovery. Per data from Nansen, the total balance of ZEC tokens held by whales has dropped by 10% over the past week. If such large-scale selling continues, it could erode retail confidence and spell more trouble for the privacy-focused altcoin in the upcoming sessions.

At the same time, speculative appetite for Zcash remains suppressed as deleveraging remains the dominant theme across the market following a series of massive liquidation events and Bitcoin struggling to reclaim $100,000.

Without a stable floor from the market leader, speculative traders have pulled back from ZEC, opting for a risk-off stance as they wait for a definitive trend reversal.

Zcash price analysis

On the daily chart, Zcash price has confirmed a multi-week head and shoulders pattern, which is typically seen as a sign that the ongoing bearish trend could continue to intensify in the short term.

The 20-day and 50-day Simple Moving Averages have formed a bearish crossover, which is another telltale sign that the short-term trend remains firmly bearish.

Hence, Zcash price is likely to drop to $300, a level it fell to during its earlier downtrend in December. At press time, this bearish target stood approximately 17% below the current ZEC prices.

However, it should be noted that a different scenario also appears to be playing out when zooming out on the charts. Zcash price action also seems to be shaping up into a much larger multi-year bullish flag pattern.

The bullish flag is one of the most reliable continuation patterns in technical analysis, suggesting that if the token can successfully break above the upper resistance of the flag, it may eventually resume its long-term upward trajectory despite the current localized weakness.

Some positive developments could support this bullish scenario. For instance, the Winklevoss twins have donated roughly $1.4 million to Shielded Labs, an independent development team behind Zcash. The funds are reportedly earmarked for the development of the privacy coin’s core protocol.

Earlier in January, they also invested over $50 million in Cypherpunk, a company focused on accumulating ZEC, and have committed to continue doing so until they hold nearly 5% of the total supply.

Meanwhile, former ECC devs are currently supporting Zcash through a new for-profit startup called cashZ, where they will work to scale Zcash adoption.