Zcash (ZEC) saw a sell-off of more than 30% after a governance rupture led to the mass resignation of the Electric Coin Company (ECC) development team. On-chain activity and exchange balance shifts suggested whale accumulation absorbed a meaningful share of retail-driven selling, helping stabilize conditions for an initial rebound.
As of Jan. 14, 2026, ZEC was up nearly 13% over three days and was trading around $421 after reclaiming the $403 support level. Short-term technical signals pointed to a tentative bullish inflection rather than a fully confirmed reversal.
Governance shock and sentiment reset
The downturn followed an abrupt split between the ECC and the Zcash Foundation’s Bootstrap arm, which quickly shifted the market’s focus from price action to stewardship risk. Former ECC leadership, led by Josh Swihart, described “malicious governance” and “constructive discharge” as the drivers of the exit, then announced a new initiative called cashZ to continue their work outside the existing Zcash structure.
The confidence hit was immediate. The developer departure coincided with an estimated $2 billion reduction in ZEC’s market capitalization, and sentiment weakened sharply as holders questioned who would own the roadmap and maintain execution discipline.
Behind the volatility, flow data pointed to a stabilizing counterforce. Large withdrawals from Binance and concentrated accumulation by large holders were described as cushioning order books during the panic, even as retail selling intensified. Two notable Binance withdrawals—202,077 ZEC (about $91.43 million) and 4,257 ZEC (about $1.93 million)—were reported moving to private wallets in late December 2025, and addresses holding more than $1 million in crypto were said to have lifted their ZEC balances by nearly 13% in a week by purchasing around 9,962 ZEC. The top 100 ZEC holders were reported to have increased positions by roughly 47.71%, adding about 15,000 ZEC during the dip, while standard whale wallets were described as adding around 2,000 ZEC (about $6 million) as retail selling peaked.
Technical levels and invalidation risk
From a technical standpoint, the MACD histogram was described as compressing toward a bullish crossover and the Parabolic SAR flipping below recent candlesticks, signalling that downside momentum may be easing. Traders highlighted $403 as immediate support and referenced a deeper base near $363, while resistance was framed at $443 and then the psychologically important $500 level.
The risk case remains tightly tied to those thresholds. Analysts warned that a breakdown below $403—and more importantly $361—would undermine the recovery narrative, with $253 cited as a potential downside level implied by a head-and-shoulders breakdown on short timeframes. Even with the rebound, a return to late-December levels was described as requiring roughly a 30.4% rally from mid-January prices, which underscores how quickly gains can evaporate if governance uncertainty re-accelerates.
For positioning, the next confirmation point is whether whales continue to hold or add on dips and whether indicator shifts are validated by follow-through volume. Turning $443 into support would strengthen the path toward $500, while renewed governance turbulence could keep volatility elevated and delay longer-term confidence repair.