Zcash [ZEC] deployed the Ironwood [NU6.3] upgrade to testnet on 2 July. In the two weeks that followed, the privacy token rose 37% and moved above the $500 supply zone.

Testnet deployments are closely watched in blockchain markets because they allow developers and users to assess upgrades before any broader network rollout. For Zcash, which is known for privacy-focused transactions, technical upgrade milestones can become a short-term catalyst, but price action still depends on whether demand follows through.

That upward momentum has since faded. Over the past week, ZEC has declined 13.6%, including a 3.1% drop in the past 24 hours. As a result, the token has moved back below the $500 mark.

Since Sunday, 19 July, ZEC has printed red candles on the daily timeframe. The question for traders is whether that sequence will extend through the weekend.

Long-term structure remains bullish, but momentum has weakened

The broader swing structure, measured from the rally between $20.7 and $750, remained bullish. Within that structure, however, ZEC has experienced significant volatility. The latest move below $500 was not viewed as a catastrophic development on higher timeframes.

Still, several indicators showed weakness. The Relative Strength Index slipped below the neutral 50 level. The Directional Movement Index’s -DI, shown in red, climbed above 20, which can be an early sign of a bearish trend developing. The A/D indicator also pointed to weak demand during July.

The $500 area has been contested since May. It has again been flipped into a supply zone, weakening the short-term bullish case. From a longer-term perspective, however, the setback may not be severe for buyers.

Short-term setup points to selling pressure

In the short term, ZEC’s failure to turn $560 into support and break above $644 suggested weakness.

At press time, the H4 structure was bearish, and Zcash had been rejected from the 78.6% Fibonacci retracement level at $560. The setup indicated that further downside could follow.

The RSI was hovering near oversold territory, suggesting that price could bounce toward the 20-period moving average at $501 before moving lower again.

The liquidation heatmap showed that short liquidations built up below $600 were targeted and cleared during the mid-July rally. Since then, the reversal appeared likely to target the $360 area, described as the next magnetic zone.

On the 4-hour timeframe, the chart also presented the $250 swing low as a price target. That low was formed after the Orchard bug was discovered. Orchard is part of Zcash’s shielded transaction infrastructure, so technical issues around it are especially relevant to sentiment in a privacy-focused network.

Final summary

Zcash’s move above $500 lasted less than a week before reversing.

Liquidation heatmap data and price action charts identified the $360 and $250 levels as the next bearish targets for ZEC. Traders will also be watching whether the Ironwood testnet phase continues without new technical setbacks, as network-upgrade progress remains one of the clearer project-specific factors around ZEC.