Zcash (ZEC), a privacy-focused cryptocurrency, rallied to $1,676 before retreating to approximately $1,568 on the Coinbase daily chart at 16:32 UTC on September 23, leaving the open daily candle down 3.8% at that point.

Daily momentum weakens while weekly RSI holds

The weekly picture looked different. At 16:35 UTC, ZEC remained 3.6% higher for the week, with more than four days left before the weekly candle closed.

On the daily timeframe, a bearish divergence is taking shape: ZEC has moved above its earlier price peak, but the relative strength index (RSI) — a momentum gauge scored from 0 to 100 — has failed to match its previous reading above 80, a zone conventionally treated as overbought. The weekly chart does not show the same weakness, with its higher RSI reading continuing to confirm the larger move.

ZEC's distance from its moving averages illustrates how extended the move has become. Price was approximately 73% above the 50-day average near $904 and about 211% above the 50-week average $502. Those averages support the longer-term trend, but they sit too far below the market to guide the current pullback.

The next decision starts at $1,600. The channel's upper boundary also rises over time, so it should not be treated as a permanently fixed price; the levels described here reflect where its lines sat when the chart was captured.

Why $1,370 matters more than the round numbers

The Fibonacci retracement on the daily chart runs from the earlier low near $360 to the September high at approximately $1,680, with its first retracement level sitting at $1,370. Such levels mark fixed percentage depths of a prior move, offering a standardized reference for how much of an advance has been given back.

That number gains relevance because the rising channel approaches the same area. A Fibonacci line on its own is only a measurement. Here, it overlaps with the structure connecting Zcash's higher lows, giving traders two independent reasons to monitor the same region.

A brief move beneath the line would limited information in such a volatile market. A daily close below it would be more significant, as ZEC would have lost both its first measured retracement and the channel supporting the accelerated rally.

The next Fibonacci level is near $1,175. It also sits close to a previous area of consolidation, making it the first defensible fallback if the channel breaks. The 50% retracement near $1,021 would matter only after a substantially deeper decline.

What the chart cannot explain

The price move has developed alongside a proposal to reduce Zcash's target block interval from 75 seconds to 25 seconds. The official ZIP 218 specification remains a draft and proposes introducing the change through NU7, a future Zcash network upgrade. As a draft, the proposal would still need to clear the network's review and activation steps before any change to block times could take effect.

The shorter interval would aim to reduce confirmation times. Rewards per block would also be adjusted so that expected daily ZEC issuance remained broadly unchanged. An earlier examination of what the shorter Zcash block proposal would change covers the mechanics and remaining implementation work.

The proposal may have contributed to demand, but available data cannot separate upgrade-related buying from speculative trading, position changes, or wider interest in privacy coins — the category of cryptocurrencies designed to let users shield transaction details, of which Zcash is one of the best-known examples.

Interest rates provide another influence outside the chart. Higher government-bond yields can make speculative assets less attractive by offering investors more return without taking crypto-level risk, while lower yields can improve conditions for risk assets — although they do not determine ZEC's direction on their own.

Reuters reported that Bitcoin and crypto-linked stocks advanced earlier in the week as oil and Treasury yields declined. That provides context for the wider rally but does not establish what caused ZEC's latest daily candle.

For this analysis, yields represent background pressure rather than a confirmed explanation for the pullback. The weaker daily RSI and the rejection near an established price high already provide a chart-based reason for traders to take profits.

Three daily closes would send different messages

A close above $1,680 would confirm another breakout. ZEC would clear the repeated high and remain in the upper portion of its rising channel. The displayed period contains no tested horizontal resistance directly above it, so another target would require a longer historical chart or a separate projection.

A close between $1,500 and $1,680 would leave ZEC consolidating. The bearish daily divergence would remain relevant, but buyers would still be defending the nearest support, and price could spend several sessions within this range without resolving the larger direction.

A close below $1,500 would bring the channel test into view, with the decisive reaction then coming near $1,370. Holding that area would preserve the sequence of higher lows; closing below it would expose the deeper retracement around $1,176.

ZEC can fall further without breaking its weekly uptrend. The more important signal would be a daily close below roughly $1,370, where the 23.6% retracement meets the trendline drawn through the higher lows. That would place price beneath the support guiding the rally, rather than simply lower within the same channel.

This article is provided for informational purposes only and does not constitute financial or investment advice. Cryptocurrency prices and technical indicators can change rapidly, while incomplete daily and weekly candles may look different by the close.