Zcash Sees 8% Rise as ETFs Welcome First Cash Inflow Since September

Zcash has recently demonstrated a surprising revival by recording an 8% increase after experiencing its first significant inflow into ETFs since September. However, some caution is warranted, as market conditions reflect a relatively subdued environment.

Leverage and Market Conditions

Lower leverage levels in the market have mitigated the risk of forced liquidations, which occur when exchanges close losing positions, consequently driving prices down further. Although this reduction signifies diminished volatility, it also indicates that the buoyant traders who drove the September price surge have yet to return. Thus, the recent inflow into Zcash ETFs transpired in a calmer market, signaling that enthusiasm may still be lacking.

Upcoming Zcash Upgrade on the Radar

Set to be reviewed on October 20, Zcash's anticipated network upgrade known as NU7 aims to significantly enhance transaction speeds by reducing block confirmation times from 75 seconds to a mere 25 seconds. The test version was launched on October 4, and the development team plans to reveal a timeline for the mainnet deployment by November 5.

Since the introduction of the testnet, ZEC's price trajectory has been concerning. Following the testnet launch on October 4, ZEC was valued at $1,352 but saw a decline to $1,110 by October 8. This suggests that the news of the upcoming upgrade hasn't been enough to halt the overall selling pressure. While quicker transaction times will improve the experience for Zcash users, they do not inherently increase demand for the coin.

Moreover, the upgrade will phase out an outdated transaction type. As per information from the Zcash Foundation, any ZEC that remains within the original privacy pool titled Sprout will become unspendable unless moved in advance of the mainnet update.

Assessing the Impact of ETF Inflows

While the recent inflow of $3.68 million into Zcash ETFs is encouraging, it's crucial to remain cautious. A single day's influx is insufficient to declare a reversal of the ongoing downtrend. Current leverage and interest levels are already lower than those prior to the September rally, which may mitigate the risk of additional forced selling.

For a more optimistic outlook, ZEC must maintain a trading price above $1,145, where it closed on October 14, leading up to the October 20 review. Furthermore, consistent and sizable net inflows over the following week would be necessary to establish a convincing trend toward potential recovery and a return to the September 26 close of $1,650. Conversely, if it closes below the $1,145 mark after October 20, ZEC may fall back toward $1,109—the level where its September upswing commenced.

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