• Zcash extends gains on Thursday, following a 4% rise the previous day.
• Retail demand improves as Open Interest rises 11% over the past 24 hours, supported by a 17% surge in trading volume.
• The technical outlook is mildly optimistic, as the recovery could test the breakout of the 50-day EMA near $450.

Zcash (ZEC) maintains a mild recovery trend this week, extending gains on Thursday following a 4% surge the previous day. The privacy coin regains retail demand, with leveraged positions rising 11% over 24 hours, supported by a 17% surge in volume. Zcash should clear the 50-day Exponential Moving Average (EMA) around $450 for a clear bullish trend ahead. 

Zcash regains retail attention amid mild recovery

Zcash maintains a consolidation-oriented tone after a short-term correction linked to a vulnerability in its Orchard shielded transaction pool. Although the vulnerabilities were patched immediately through emergency network upgrades, with no reported cases of exploitation, retail sentiment dipped. 

The mild recovery so far this week reflects a renewed demand for the privacy coin as US Federal Reserve Chairman Kevin Warsh's statement that “prices are too high” lifts crypto market sentiment. CoinGlass data shows that Zcash derivatives volume is up 17% in the last 24 hours, reaching $1.45 billion, indicating a boost in leveraged trading activity.

During the same period, ZEC futures Open Interest (OI) surged by over 11% to $836.17 million, indicating a positional buildup and a potential directional move ahead. In addition, the short liquidations of $2.07 million outpace the long liquidations of $369,540 over 24 hours, reaffirming buy-side dominance. 

Finally, the funding rate dipped to near-zero levels on Thursday, after maintaining a positive bias last week, indicating an easing of bullish sentiment among traders, who are now less likely to buy long positions at a premium.

Overall, the Zcash derivatives signal optimism among traders that could support a renewed recovery.

Mild recovery in Zcash signals a potential bullish avalanche move ahead

Zcash holds a steady near-term recovery above $400 on Thursday, following a rebound from the 200-day EMA around $380 last week. At the time of writing, ZEC is trading higher toward the 50-day EMA at around $451, which serves as the immediate upside barrier.

From a technical perspective, the declining 50-day EMA and the flat 200-day EMA indicate a short-term correction within a broader upward trend. However, a breakout above the 50-day EMA at $451 could reinstate the prevailing bullish trend. The 78.6% Fibonacci retracement level at $520, measured over the upswing from $184 to $690, could emerge as the primary bullish target, followed by the previous swing high of $690.

That said, the Moving Average Convergence Divergence (MACD) hints at a potential bullish crossover above its signal line, with the negative histogram contracting, suggesting improving momentum. Meanwhile, the Relative Strength Index (RSI) around 46 maintains a broadly neutral bias.

On the downside, nearest support emerges around the 200-day EMA at $380, reinforced by the 50% retracement at $356. A loss of this zone would expose the deeper 23.6% Fibonacci retracement at $251, where longer-term buyers could attempt to reassert control.

(The technical analysis of this story was written with the help of an AI tool.)