Zcash needs to grow by 59% to fully recover — Can the market meet the challenge?

After a sharp decline that caused the value to lose more than half in November, Zcash (ZEC) is gradually striving to regain its position. The recent 40% price increase has somewhat rekindled market confidence, but many underlying factors could still hinder ZEC’s sustainable recovery process.

Zcash Diverges from Bitcoin Trend

The RSI index shows a growing optimistic sentiment as Zcash regains momentum. For the first time in nearly two weeks, the RSI has crossed the neutral 50 level, reflecting a significant improvement in investor confidence. The RSI moving into positive territory is often an early signal of a trend reversal cycle, laying the groundwork for ZEC’s continued bullish momentum.

However, the RSI’s recovery is not enough to guarantee a full-scale rebound. The crypto market remains sensitive to macroeconomic fluctuations, and small shifts in sentiment can also impact ZEC’s strength. To sustain the current upward momentum, Zcash needs ongoing stable and sustainable buying pressure.

ZEC RSI Index | Source: TradingView Notably, the correlation between Zcash and Bitcoin is currently at -0.47, indicating a clear divergence as Bitcoin begins to recover. This divergence poses a challenge for ZEC: if Bitcoin continues to grow, ZEC might face resistance pressure, as the negative correlation often limits upward movement when the overall market is strong.

ZEC and Bitcoin Correlation | Source: TradingView Conversely, if Bitcoin slows down or weakens, ZEC could leverage this correlation to grow independently, extending its recovery trend without being influenced by the overall market direction. This makes ZEC’s outlook unpredictable, heavily dependent on Bitcoin’s next moves.

ZEC Price Struggling to Break Resistance Level

Currently, ZEC is traded at $439, just below the key resistance level of $442. Although the recent 40.5% increase is impressive, it still isn’t enough to offset the 55% plunge in November.

For a true recovery, Zcash needs to increase by nearly 59% in the coming period to reach $700. In the short term, if ZEC surpasses and maintains above $442, the price could extend to the $520 range if this level turns into support.

ZEC Price Analysis | Source: TradingView Conversely, if the negative correlation with Bitcoin becomes a resistance, ZEC risks falling to $403, and potentially down to $340. This would erase most of the recent growth gains and weaken the positive outlook for this coin.