invezz.com 
Zcash ($ZEC) has recovered to roughly $1,140 on Monday after falling nearly 6% over the past seven days.
Despite the pullback, market activity remains elevated. $ZEC recorded approximately $1.4 billion in trading volume, equivalent to more than 7% of its circulating market capitalization.
This suggests traders remain highly engaged even as the token struggles to extend its rally.
Macroeconomic concerns halt Zcash rally at $1,300
Zcash encountered significant selling pressure near $1,300 as the deteriorating US macroeconomic outlook weighed on the broader cryptocurrency market.
A stable inflation report initially triggered a rally across digital assets on Friday.
However, those gains quickly faded as market expectations for an interest-rate hike at the Federal Reserve’s next meeting climbed to nearly 90%.
The Federal Open Market Committee is scheduled to meet on September 16.
Investors will closely monitor comments from Fed Chair Kevin Warsh for clues about how policymakers intend to address persistent inflation.
Inflation remains well above the central bank’s 2% target, raising concerns that price pressures could become more difficult to control.
Meanwhile, the White House has continued to advocate for lower interest rates, even though monetary easing could intensify inflation in the short term.
This uncertainty may encourage cryptocurrency traders to reduce risk before the Fed’s decision.
Zcash has still significantly outperformed much of the cryptocurrency market, gaining approximately 116% in 2026.
Demand for the asset appears to be supported by its privacy technology and clearly defined use case.
The network recently faced a credibility challenge after an audit uncovered a vulnerability that could have allowed knowledgeable attackers to mint an unlimited number of $ZEC tokens.
In response, the Zcash community introduced Ironwood, a new vault designed to strengthen the network’s underlying code.
Millions of $ZEC have since migrated from the previous Orchard vault, indicating continued confidence among users.
Adoption of Zcash’s privacy features is also increasing.
Data from ZecHub shows that shielded transactions have reached their highest level in almost two years, representing 56% of all activity on the blockchain.
The rise in shielded usage suggests Zcash’s core privacy functionality remains a major attraction for users.
Bearish RSI divergence signals weakening momentum
$ZEC’s daily chart is beginning to show signs that the recent rally may be losing strength. A bearish divergence has appeared on the Relative Strength Index.
This occurs when an asset’s price reaches a higher level while the RSI forms a lower high, indicating that bullish momentum is weakening despite continued price appreciation.
Such divergences commonly emerge during the later stages of an upward move and can precede a substantial correction.
With liquidity thinning at elevated prices and macroeconomic uncertainty increasing, $ZEC could retreat toward the $850 area.
Traders may also close profitable positions or purchase put options before the Fed meeting, adding to short-term selling pressure.
Although the technical outlook points to a near-term correction, the broader Zcash rally may not be over.
$ZEC previously broke out of an ascending-triangle pattern, producing a longer-term technical target near $2,500.
A decline toward $850 could therefore represent a reset within the existing uptrend rather than the beginning of a sustained bearish reversal.
If the $850 region attracts buyers and holds as support, Zcash could eventually resume its advance toward the projected $2,500 target.
However, the token’s immediate direction will likely depend on the Federal Reserve’s policy decision and the broader market’s reaction.
