Zcash Holds $1,300 as NU7 Cuts Block Times to 25 Seconds

Zcash (ZEC) maintained its strength above $1,300 on Friday, outperforming a broader cryptocurrency market downturn that triggered more than $1 billion in liquidations a day earlier. The privacy-focused cryptocurrency attracted attention following the activation of its seventh network upgrade, NU7, which introduces faster transaction processing and changes to its fee-management system. However, institutional outflows from Grayscale’s Zcash ETF indicate lingering selling pressure. Meanwhile, rising derivatives activity suggests traders are maintaining leveraged exposure as ZEC approaches a critical $1,340 resistance level that could determine its next major price direction.

Zcash Upgrade Boosts Network Activity

Zcash traded around $1,308 on Friday after demonstrating resilience despite widespread cryptocurrency market losses. The NU7 network upgrade, activated at block height 3,543,405, represents a significant technical development for the privacy-focused blockchain.

The upgrade reduces target block intervals from 75 seconds to 25 seconds, allowing transactions to receive their first confirmation approximately three times faster. It also disables legacy version 4 transactions associated with the original Sprout privacy pool.

Another major change involves the Network Sustainability Mechanism (NSM), which redirects 60% of transaction fees into a reserve for future reissuance through block rewards. This mechanism is designed to support long-term network sustainability while preserving Zcash’s existing 21 million coin supply limit.

These changes include:

• Transaction speed: Block intervals fall from 75 to 25 seconds.
• Fee allocation: 60% of transaction fees enter the sustainability mechanism.
• Legacy transactions: Version 4 transactions become invalid.
• Supply policy: The maximum ZEC supply remains capped at 21 million.

The upgrade could improve transaction efficiency and strengthen the network’s long-term infrastructure, although its effect on ZEC’s market valuation will depend on adoption and demand.

ETF Outflows Clash With Rising Derivatives

Institutional investment flows present a less supportive picture. According to SoSoValue, Grayscale’s Zcash-focused ETF (ZCSH) recorded approximately $10.99 million in net outflows on Thursday, bringing weekly withdrawals to $14.77 million.

Persistent redemptions could weaken institutional demand and interrupt the fund’s recent positive weekly inflow trend.

However, CoinGlass derivatives data indicates stronger speculative positioning. Zcash’s Open Interest (OI), representing the total value of outstanding futures contracts, increased to 2.15 million ZEC from 2.05 million the previous day.

The increase suggests traders are rebuilding leveraged positions despite the recent liquidation event. However, rising Open Interest does not automatically indicate bullish positioning because both long and short contracts contribute to the total.

ZEC Price Forecast: $1,340 Resistance

Technically, ZEC remains within a consolidation range, with immediate resistance near $1,340, corresponding to the October 8 high. The October 8 low around $1,112 represents the broader support floor.

The cryptocurrency continues trading above its 50-day Exponential Moving Average (EMA) at $1,216 and its 200-day EMA near $856, maintaining a constructive longer-term technical structure.

Daily momentum indicators also support a cautiously positive outlook. The Relative Strength Index (RSI) stands around 55, while the Moving Average Convergence Divergence (MACD) remains above its signal line.

A confirmed daily close above $1,340 could open the way toward the September 26 peak of $1,698, representing potential upside of approximately 27%.

On the downside, important levels include:

• $1,216: Initial support at the 50-day EMA.
• $1,112: Major consolidation support.
• $856: Longer-term support near the 200-day EMA.

Conclusion

Zcash combines improving network technology with growing derivatives participation, although ETF withdrawals remain a concern. NU7’s activation provides an important infrastructure milestone, but sustained buying pressure is necessary to confirm a bullish reversal. A decisive breakout above $1,340 could expose $1,698, while rejection at resistance could send ZEC back toward $1,216.