Zcash (ZEC) has fallen sharply, losing 16% in 24 hours as privacy-focused tokens weaken. The altcoin trades near $212-$218, but a Fair Value Gap suggests a deeper drop to $116 before recovery is possible. Liquidity data shows concentration above current prices, supporting a near-term upside move toward $250-$260. Positive funding rates and recent spot inflows also suggest building support for a rebound attempt.
The privacy-focused moat supporting assets like Zcash [ZEC] has significantly weakened. ZEC fell by 16% in 24 hours amid intensified selling pressure, though signs of stabilization appeared between $218 and $212 on short-term charts. The daily timeframe shows a Fair Value Gap (FVG) below the current price, representing a demand zone between $116 and $77.
This FVG typically acts as a magnet for price, meaning ZEC may need to trade into this zone before a sustained recovery develops. The depth of further decline depends on whether the support level near $202.44, which triggered a 270% rally to an all-time high, continues to hold. A recognizable double bottom pattern is forming at that level, a structure that has historically preceded bullish reversals.
Liquidity distribution currently supports the rebound thesis. Minimal liquidity exists below the spot price, reducing incentive for aggressive downside continuation.
Liquidity appears denser above current prices, particularly between $250 and $260, aligning with an unlabeled FVG zone and reinforcing the technical case for a near-term upside move. Perpetual market data also leans constructive, with positive Open Interest-weighted funding rates indicating stronger positioning from long participants relative to shorts.
Spot market activity hints at renewed retail interest. On Thursday, February 7, $13.7 million worth of ZEC saw its largest single-day spot inflows since January 31. Early data for Friday showed sellers temporarily regaining control, with net outflows of $5.69 million exceeding buyer purchases.
Despite short-term volatility, the altcoin’s price structure, liquidity positioning, derivatives data, and recent spot inflows all suggest the probability of a rebound remains elevated. Market sentiment continues to favor recovery, though confirmation depends on how the price reacts around key support and liquidity zones in the sessions ahead.
