Zcash Price Faces Selling Pressure as Open Interest Declines Post Rally

• Zcash price shows a bearish reversal from the resistance trendline of a falling wedge pattern 
• The Federal Reserve’s decision to hold interest rates steady added further pressure on high-risk assets like cryptocurrencies.
• The coin price positioned below the 50-and-200-day EMA indicates the broader trend as bearish.

Zcash, the privacy-focused cryptocurrency, plunged roughly 9% on Wednesday to trade at $248. A primary catalyst for this drop was the U.S. Federal Reserve’s decision to hold interest rates steady and persistent conflict in the middle east. However, the Zcash faced additional selling pressure from the combined resistance of the 200-day exponential moving average and resistance trendline of a long-coming reversal pattern. 

ZEC Drops 15% Amid Fed Decision and Geopolitical Tensions

In the last two weeks, the Zcash price showed a notable recovery from $192 to $290 weekly high, registering a 51% surge. 

 The upswing got a boost with more general renewed interest in privacy-focused cryptocurrencies. Assets in this category tend to attract inflows when market participants are looking at certain niche areas that put a focus on financial privacy, especially when attention is shifting away from dominant Layer-1 networks and AI-related tokens. Such rotations are an additional drive once upward breaks have been indicated by the price patterns.

The advance was short lived with Zcash price falling over 15% in the past 48 hours to $243 at current levels. Consequently, the asset market cap is $4.07 billion, while the 24-hours trading volume is recorded at $591 million. This drop coincided with an increase in geopolitical pressures in the Middle East with the Federal Reserve’s decision to keep the benchmark interest rate at or near the 3.5%-3.75% target range.

Derivatives activity reflected the shift, with positions linked to Zcash falling significantly. According to Coinglass, in the last two days, the Zcash open interest has declined from $474 million to $409.2 million, which is a 13.5 decline in the open interest.

The open interest decline implies that traders are closing out positions, and often an indication of less exposure, position unwinds, or exhaustion after the previous rally, especially since there was not a sustained new entry of contracts in the prior rally.

Zcash Price Drives Short Correction Amid Flag Pattern

With today’s market decline, the Zcash price created an evening star— bearish candle pattern in the daily chart. Interestingly, the reversal was positioned at the combined resistance of 200-day EMA and the falling resistance trendline of a falling wedge pattern.

Typically, the chart setup is a well-known reversal pattern, where the two converging trendlines indicate the weakening bearish momentum.

Historically, such reversal signals at wedge pattern resistance, signals a potential drawdown in price. With sustained selling, the coin price could plunge roughly 20% to retest $196, followed by a dip to $121.

The momentum indicator RSI (Relative Strength Index) at 52% suggests a neutral to slightly bullish sentiment in the market.

Thus, a potential breakout from the pattern’s resistance trendline with daily candle close will indicate a major shift in market dynamics. 

With sustained buying, the Zcash price could surge 28% to hit $333, followed by leap to $400.