Zcash is attempting to recover the losses accumulated in November after a steep decline cut its valuation by more than half. 

The latest 40% rally has brought optimism back to the market, yet several underlying factors suggest ZEC may still struggle to complete a meaningful recovery.

Zcash Is Not Following Bitcoin

The RSI shows that bullish sentiment is strengthening as Zcash begins regaining traction. The indicator has climbed above the neutral 50.0 mark for the first time in nearly two weeks, signaling improved market confidence. A move into the positive zone often serves as an early sign of trend reversal, which could support ZEC’s continued upward move.

However, the recent uptick in RSI alone does not guarantee a full recovery. The broader market remains sensitive to macroeconomic cues, and even minor shifts in sentiment could impact ZEC’s momentum. Sustained bullish pressure will be necessary to ensure that the current rally does not fade prematurely.

ZEC RSI. Source: TradingView

Zcash’s correlation with Bitcoin currently sits at -0.47, reflecting a negative relationship at a time when BTC is beginning to show signs of recovery. This divergence poses a risk for ZEC. If Bitcoin continues rising, ZEC could face resistance, as negative correlation often limits upside potential when the broader market strengthens.

On the other hand, if Bitcoin loses momentum or slides downward, the negative correlation could work in ZEC’s favor by allowing it to extend its rally independently. This dynamic creates uncertainty, with ZEC’s path forward depending heavily on Bitcoin’s next major move.

ZEC Correlation With Bitcoin. Source: TradingView

ZEC Price Is Making Efforts

ZEC is trading at $439 at the time of writing, sitting just below the key $442 resistance. The recent 40.5% gain is notable, but it remains insufficient to offset the 55% crash suffered in November.

For a true recovery, Zcash would need to climb nearly 59% in the coming days to reach $700. In the short term, a break above $442 could open the door to a move toward $520 if the level is flipped into support.

ZEC Price Analysis. Source: TradingView

If the negative Bitcoin correlation becomes a headwind, ZEC could drop back to $403 and potentially fall to $340. This would end up erasing a chunk of the recent rally and invalidating the bullish outlook.