Zcash slipped from $1300 and risks falling back to $850 before a new round of gains

Zcash (ZEC) rebounded to about $1,140, but macro uncertainty weighed on gains

On Monday, Zcash (ZEC) rebounded to about $1,140 after falling nearly 6% over the past week. Despite the recent price correction, trading volume for the token remains strong, reaching US$1.4 billion, accounting for more than 7% of its outstanding market value. This high activity suggests strong trader engagement, even if ZEC is struggling to maintain its upward momentum.

Macroeconomic uncertainty challenges Zcash gains

Zcash faces significant selling pressure around US$1,300, mainly due to continued concerns about the U.S. economic outlook. Friday's solid inflation report briefly boosted digital asset markets, including ZEC, but the gains quickly subsided as market participants began to expect the Fed to raise interest rates at upcoming meetings. Currently, market expectations for interest rate hikes have risen to nearly 90%.

The Federal Open Market Committee (FOMC) is scheduled to hold its next policy meeting on September 16. Many investors will be closely watching Federal Reserve Chairman Kevin Warsh's remarks for signs of how policymakers can respond to stubborn inflation, which is still well above the Fed's 2 percent target.

As inflation continues to run high, the market is worried that continued price pressure may be difficult to control. Despite the White House's recent statement calling for lower interest rates, some analysts warned that easing monetary policy could exacerbate inflation risks in the near term. This background of uncertainty has prompted many cryptocurrency traders to limit exposure ahead of this key announcement by the Federal Reserve.

Despite recent challenges, ZEC has outperformed most crypto markets as of 2026, with a year-to-date increase of approximately 116%. Analysts pointed out that Zcash's focus on privacy technology and its specific use cases in confidential transactions continue to drive market demand.

Market participants noted that the Zcash Network maintained strong user confidence after migrating millions of tokens from the old Orchard vault to the newly introduced security solution Ironwood. However, a recent audit exposed a vulnerability that could be exploited to mince unlimited numbers of ZEC tokens, putting Zcash through a credibility test. In response, the Zcash community has implemented Ironwood, a new treasury system designed to enhance the security of the underlying protocols.

Mini Dictionary: Ironwood

Ironwood is a secure vault system designed by the Zcash community to protect the supply of tokens and enhance the security of protocols after potential casting vulnerabilities are exposed.

User confidence in this privacy-focused blockchain seems to remain stable. According to ZecHub, shielded transactions now account for 56% of total online activity, reaching their highest level in nearly two years. This trend highlights the continued appeal of Zcash's private transaction feature to users concerned about confidentiality.

Bullish rally under threat, technical signals weaken

Technical analysis shows that ZEC's recent gains may be weakening. There was a bearish divergence in the daily Relative Strength Index (RSI), which means that while prices hit higher levels, the RSI reached lower highs. This pattern usually signals a weakening of bullish momentum and may signal an imminent price correction.

Such divergences tend to occur late in the market's upswing phase and can signal a significant correction. As liquidity at current price levels becomes thinner and macro uncertainty increases, ZEC may fall to the $850 region seeking support. Some traders are expected to lock in profits or buy protective options before the Fed meeting, creating short-term selling pressure. However, if the $850 area attracts buyers, ZEC's broader upward trend may continue.

Previously, Zcash broke through the rising triangle and set a long-term technical goal of close to US$2,500. Analysts believe a temporary decline to $850 could be a reset opportunity in a larger uptrend rather than a fundamental shift to a continued bearish view.

Zcash's next direction is likely to depend on the progress of the Federal Reserve meeting and the overall reaction of the digital asset market. If support around $850 is maintained and macroeconomic conditions are stable, ZEC may resume climbing and move towards the technical target of $2,500.