Zcash (ZEC), the leading privacy-focused cryptocurrency, faces heavy selling pressure after experiencing a drop of more than 25% during this month. However, various Zcash network indicators suggest that there is a solid structural confidence, manifested through record activity in both its mining infrastructure and the adoption of its anonymity features.
Despite the risk-off sentiment dominating global financial markets, the coin has managed to maintain an active user base. Currently, ZEC’s performance is being affected by the recent split of the Electric Coin Company (ECC) team from Bootstrap, which has generated uncertainty about the future governance of the project among institutional investors.
Growth in the use of shielded addresses and on-chain privacy
A revealing piece of data emerging from blockchain analysis is that more than 5 million ZEC are currently stored in shielded addresses. This figure, which represents approximately 30% of the total circulating supply, indicates that real users are prioritizing the privacy of their transactions, regardless of the price volatility currently affecting the asset.
The steady increase in funds deposited in these protection pools, which began to pick up after a slight decline in January, reflects an unwavering commitment to privacy infrastructure. This phenomenon shows that, for a significant part of the community, the technical utility of the cryptocurrency prevails over the short-term fluctuations occurring in centralized exchanges.
On the other hand, the network’s mining difficulty reached an all-time high in early February, evidencing fierce competition among hardware operators. This increase in aggregate computing power, which strengthens the overall security of the protocol, suggests that Zcash mining remains an economically viable activity for large industrial operations using specialized high-end equipment.
What drives miners to continue betting on Zcash despite the price drop?
Likewise, profitability for miners who own efficient hardware, such as the Antminer Z15 Pro, remains at surprisingly attractive levels today. In this way, the network attracts new hashrate on a constant basis, which translates into a system that is much more resistant to possible external attacks, confirming that the project’s operational base is at one of its strongest points.
Therefore, the contrast between the price action and the operational vigor of the network presents an interesting technical divergence scenario. Having reached a record difficulty in the middle of a downtrend, miners seem to be strategically positioning themselves for a possible future appreciation, trusting that market value will eventually align with the real security and utility of the platform.
However, the asset must still overcome the psychological and technical barrier imposed by the 41% drop suffered during the month of January. As a result, Zcash network indicators will be essential to determine if the current support around 227 dollars can hold against macroeconomic pressure, which continues to challenge the recovery of privacy-oriented assets.
In conclusion, although the current price reflects a period of weakness, technical fundamentals show an expanding network with more participation than ever before. Thus, investors are waiting to see if the consolidation of privacy features, combined with unprecedented network security, finally manages to reverse the negative trend that has characterized the beginning of this year.
