Zcash trades near $1,348 as ETF outflows moderate and NU7 testing begins

Essential takeaways

• On Tuesday, Zcash is trading near $1,348, maintaining the modest gains it recorded since Sunday.
• The NU7 upgrade is now live on the public testnet. A mainnet activation decision is set for Oct. 20, with deployment aiming for Nov. 5.
• While improving momentum aids recovery prospects, ZEC needs to break above resistance in the $1,377–$1,384 range.

Zcash is trading below $1,348 on Tuesday, holding onto the modest gains it posted on Sunday. Investors are weighing the impact of reduced ETF outflows and progress on the network's next upgrade.

The near-term outlook for the privacy-focused digital asset is mixed. While momentum indicators show improvement, the price continues to trade below two key moving averages on the four-hour timeframe.

At the same time, reduced withdrawal volumes from Grayscale's Zcash-focused fund indicate that redemption pressure has eased.

Nonetheless, outflows are still negative, implying that the latest data point to less selling activity through that vehicle rather than a return to net purchasing.

This combination creates a more favorable environment for a price recovery, though a sustained breakout has not yet occurred.

NU7 upgrade tests faster blocks and updated mining incentives

The NU7 upgrade for Zcash is now operational on the public test network. Developers plan to decide on mainnet activation by Oct. 20, with Nov. 5 still the intended deployment date.

The upgrade shortens the target block interval from 75 seconds to 25 seconds. Generating blocks more often could reduce confirmation times, but it does not ensure that each transaction will be processed three times as quickly.

Actual block times and the confirmation thresholds defined by individual services remain important factors.

NU7 also includes a Network Sustainability Mechanism that channels 60% of transaction fees to future mining rewards. Additionally, a change restricts shielded actions to curb network spam.

If deployed on mainnet, the upgrade would deactivate legacy Sprout version 4 transactions. Users who still hold funds in that pool must transfer them in advance to continue spending via the current system.

These modifications are still in the testing phase. Their prospective advantages have not yet been implemented on the live Zcash network.

According to SoSoValue, Grayscale's ZCSH fund saw net outflows of roughly $3.57 million on Monday.

This came after total withdrawals of $93.56 million in the prior week, which included three trading days each with outflows exceeding $25 million.

The smaller figure on Monday is an improvement compared to those individual sessions. Yet comparing a single day to a full week does not indicate how the current week will end.

The most recent figures point to reduced immediate redemption pressure, but the future flow direction remains unclear. Consistent inflows would offer more solid proof that demand via the fund is bouncing back.

Momentum gains face resistance above

On the four-hour chart, ZEC is still trading under its 50-period and 100-period exponential moving averages, which sit near $1,377 and $1,384.

This group of levels constitutes the nearby resistance area. A sustained climb above both averages would enhance the short-term structure and put $1,422, the violated Sept. 18 low, on the radar.

Above that, the Sept. 23 peak of $1,679 serves as a further upside target.

Momentum gauges provide some positive signs. The MACD has moved above its signal line, and its histogram is extending into positive ground.

The RSI is around 50, pointing to generally neutral momentum. The provided analysis also notes a bullish divergence, hinting that selling pressure may be fading, but price confirmation is still needed.

The ascending 200-period EMA around $1,281 offers the nearest support level below the current consolidation zone.

Maintaining this level would keep alive the view that the recent decline is a correction in a broader recovery. A sustained drop below it would undermine that scenario and bring the next noted support near $1,050 into play.

Currently, Zcash is sandwiched between a rising support average and overhead resistance. Reduced ETF outflows and improving momentum support the recovery narrative, but a move above $1,377–$1,384 would offer a clearer bullish indication.