Foreign media reports that Zcash (ZEC) has rebounded significantly after a recent sharp decline, with the price briefly approaching $300 before returning above $420 within a few days. The article argues that this volatility is more likely a correction following a concentrated liquidation of highly leveraged positions, rather than a sign of a weakening medium- to long-term trend.

$390 to $400 remains key

This commentary identifies the $390-$400 range as the most important support level. This area has repeatedly acted as a turning point for prices over the past year. During the recent decline, ZEC briefly broke below this range but was quickly pulled back by buying, leaving a long lower shadow on the daily chart, indicating continued support at lower levels.

The article also mentions that the simultaneous increase in trading volume during the period of increased volatility indicates that this rebound did not occur in an environment of thin liquidity. Meanwhile, prices have rebounded above the 200-day moving average, and bulls are attempting to transform this area into a new consolidation platform.

Open interest fell sharply

However, the article also points out that although the Relative Strength Index (RSI) has rebounded from its lows, it remains in a downward trend. This means that short-term sentiment has improved somewhat, but bearish pressure has not completely disappeared. The rebound structure will only be considered complete if prices continue to hold above $390 to $400.

The article cites derivatives data showing that ZEC open interest fell from nearly $800 million to approximately $418 million over the past month, indicating that a large number of leveraged positions were liquidated or actively exited during the correction. In contrast, funding rates did not turn significantly negative, but remained at a relatively stable, slightly positive level, suggesting that traders as a whole have not significantly shifted to a bearish stance.

$450 is the next resistance level.

Based on this, the article concludes that we are closer to a large-scale leverage reset. In other words, after the crowded positions in the futures market are cleared, the price structure has room to reorganize, rather than a deeper trend breakdown has occurred.

Regarding the subsequent trend, the article believes that $450 is the first resistance level that the bulls need to break through. If the price can effectively stand above this level, the market may further target $550. Looking further up, the area around $650 remains a stronger resistance zone, where significant selling pressure has been encountered in previous rounds of upward movement.

Additional information:The article also mentioned that if ZEC falls back and breaks below the $390 to $400 range, the price may retest $350, and then it is possible that it will return to the previous low of around $304.