Zcash Drops 20% Amid ETF Outflows and Geopolitical Concerns

Zcash (ZEC) has experienced a sharp decline, falling more than 20% from its all-time high. The downturn comes amid significant outflows from Grayscale’s ZCSH ETF, which recorded approximately $93.6 million in net outflows during the week ending October 2. This marks the first negative week for the ETF since late August. The outflows are likely driven by negative geopolitical developments and expectations of a Federal Reserve rate hike, as much of the Zcash-specific positive news has already been priced in.

On the technical front, Zcash has broken below a major upward trendline, extending losses as sellers target a drop to the 1,031 level. If this level holds, buyers may step in, positioning for a rally into new highs. Conversely, sellers could push the price further down to the 800.00 level. On shorter timeframes, a minor upward counter-trendline on the 4-hour chart and a downward trendline on the 1-hour chart are defining the current price movements.

Looking ahead, the US-Iran geopolitical situation will remain a key focus. A breakthrough in negotiations could ease Fed rate hike expectations and boost Zcash’s price, while a prolonged stalemate or deterioration could continue to weigh on risk sentiment. Additionally, Zcash recently activated the NU7 upgrade on its public testnet, ahead of the expected October 6 date. This upgrade reduces the target block time from 75 seconds to 25 seconds and introduces new features, including a Network Sustainability Mechanism and limits for shielded transactions. The final mainnet activation decision is set for October 20, with November 5 currently targeted for the upgrade.

This week’s economic calendar includes several key events, such as the US ISM Services PMI, FOMC meeting minutes, US Jobless Claims figures, and the University of Michigan Consumer Sentiment survey. These events could further influence market sentiment and Zcash’s price movements.