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Zcash spikes 13% as dynamic fee proposal tightens supply
Zcash (ZEC) jumped roughly 13% to $460, outperforming a broadly sideways crypto market as market cap and 24-hour trading volume surged. The rally follows a high-profile proposal from Zcash developers and Shielded Labs to move from a fixed fee schedule to a dynamic fee market — a change designed to lower transaction costs and improve efficiency during congestion.
Developers push dynamic fee market to ease congestion
The dynamic fee market proposal aims to replace static transaction fees with a system that adjusts fees in response to network demand. Proponents say this will reduce user costs during busy periods, make fee estimation more predictable, and increase the protocol’s overall UX for privacy-focused transactions. The announcement appears to have catalyzed renewed interest from both retail traders and institutional participants, lifting trading volumes and fueling ZEC’s outperformance.
On-chain accumulation and institutional bids reduce circulating supply
On-chain analytics revealed sizable accumulation by large wallet holders in the 24-hour window. Cypherpunk Technologies expanded its ZEC treasury and confirmed appointing Zcash founder Zooko Wilcox as an advisor, fueling narrative strength. One notable whale reportedly transferred tokens to derivatives platform Hyperliquid to open long positions, a move that commonly reduces immediate circulating supply and can amplify upside pressure.
Technical context: resistance test near $420 and breakout potential
Technical analysts, including Crypto Pulse, note that ZEC was testing a multi-touch resistance zone near $420 prior to the breakout attempt. A confirmed move above that level could target prior cycle highs and invite additional momentum traders, while failure to hold gains might prompt a pullback toward nearby support bands. Volume spikes accompanying today’s rally suggest participation from both retail and institutional desks, which is key to sustaining a breakout.
What traders and investors should watch
Key variables to monitor include developer progress on the dynamic fee implementation, on-chain flows into centralized exchanges versus long-term custody, and Cypherpunk’s ongoing ZEC accumulation. Watch for how the market digests any technical breakout or rejection at resistance, and track liquidity on derivatives venues — especially where large wallets are positioning longs.
Zcash’s price action illustrates how protocol-level upgrades and concentrated accumulation can combine to tighten short-term supply and trigger outsized moves, even when the broader crypto market lacks clear direction. For investors focused on privacy coins, blockchain developments and treasury activity remain critical catalysts to follow.
Source: crypto
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