Zcash Price Forecast: NU7 upgrade sets the stage for ZEC to resume its rally

• Zcash edges higher on Tuesday, hovering around $1,350 after a 3% rebound on Sunday.
• Zcash activated its NU7 network upgrade on the public testnet, reducing the block time to 25 seconds for faster settlements. 
• ZEC ETF outflow eases to $3.50 million on Monday, down from over $25 million recorded over the previous three sessions.

Zcash (ZEC) hovers around $1,348 at press time on Tuesday, sustaining its mild gains from Sunday. The network upgrade NU7 went live on Monday, boosting transaction speed and redirecting 60% of transaction fees into future rewards. The institutional outflow eased to roughly $3.50 million on Monday, down from $93.56 million last week, suggesting reduced pressure from redemptions. 

The technical outlook for Zcash indicates an upside bias with a bullish RSI divergence spotted on the 4-hour chart.

NU7 upgrade and reducing ETF outflows position Zcash to resume rally

Zcash launched its NU7 upgrade on the public testnet on Monday, with the mainnet decision scheduled for October 20 and a November 5 target. NU7 reduces the block time from 75 seconds to 25 seconds, increasing transaction speed by 3x. The upgrade also introduces a Network Sustainability Mechanism that redirects 60% of fees to future rewards and limits shielded actions to reduce network spam. The mainnet activation of this upgrade would retire the old Sprout v4 transactions, making the funds left in the legacy pool unspendable.

On the institutional level, Grayscale’s ZEC-focused Exchange-Traded Fund (ETF), ticker ZCSH, saw outflows of $3.57 million on Monday, after three sessions of more than $25 million in outflows last week, totaling $93.56 million. This sharp decline in outflows suggests reduced selling pressure from investor redemptions.

The easing of ETF outflows and the NU7 upgrade position Zcash for an extended rally, offering safer, faster on-chain privacy amid potential positive institutional inflows.

Technical outlook: Zcash eyes next leg higher on bullish RSI divergence

Zcash trades around $1,348 at press time on Monday, maintaining a long-term upside bias. However, ZEC sees a mild bearish shift in the near term as the price slips below the 50- and 100-period Exponential Moving Averages (EMAs) at $1,377 and $1,384, respectively. Still, the privacy coin is underpinned by the rising 200-period EMA at $1,281, suggesting that downside setbacks remain corrective as these structural floors hold.

From a technical perspective, Zcash consolidates between the 200-period EMA, which acts as the support floor, and the overhead cluster of the 50- and 100-period EMAs. A sustained break above these clustered EMAs would be needed to ease the current cap and open the way for a stronger recovery phase. Looking up, the potential breakout rally could target the broken September 18 low at $1,422, followed by the September 23 high at $1,679.

Momentum is improving, with the Moving Average Convergence Divergence (MACD) rising above its signal line and the histogram expanding positively. At the same time, the Relative Strength Index (RSI) hovers near 50 but prints a higher high as price tests the 200-period EMA, suggesting a bullish divergence that supports the upside bias.

On the downside, immediate support is at the rising 200-period EMA at $1,281, ahead of the September 4 high at $1,050, where buyers are likely to re-emerge on the first test.

(The technical analysis of this story was written with the help of an AI tool. Know more.)