ZEC, the native coin of the Zcash ecosystem, is consolidating around the $1,330 region on Monday.
The coin recovers from a weekend low of $1,254 after the team announced that it has activated its NU7 network upgrade on the testnet, moving its proposed protocol changes into live testing roughly a month before the targeted mainnet launch.
According to Zcash testnet explorer ZecBlock, the scheduled activation block, 4,465,026, was mined on Oct. 4 at 18:21:45 UTC. Zcash subsequently confirmed in a post on X that NU7 was live on the testing network.
The activation marks a step toward deployment, allowing developers and infrastructure operators to evaluate how the new rules function under testnet conditions.
It also creates a period for assessing the upgrade before developers commit to an activation height on the live network.
Mainnet deployment remains targeted for Nov. 5. That date is provisional, with the final decision scheduled for Oct. 20.
Faster blocks are a central change
One of NU7’s main objectives is to reduce Zcash’s target block spacing from 75 seconds to 25 seconds.
Blocks record batches of transactions. Shorter intervals would allow the network to produce those batches more frequently, potentially reducing the time users wait for their payments to receive confirmations.
The proposed interval is one-third of the current target, representing a substantial change to the network’s transaction-confirmation cadence. However, target block spacing does not guarantee that every block will arrive exactly 25 seconds after the previous one.
The testnet phase allows operators to observe the upgraded network before the same rules apply to transactions involving real ZEC. Whether NU7 proceeds to mainnet will depend on developers’ assessment of that testing experience.
NU7 also introduces a Network Sustainability Mechanism that redirects part of transaction fees into future block rewards.
The mechanism changes how fees contribute to compensating miners, who produce blocks and help secure the network.
Rather than treating all transaction fees solely as immediate rewards, the proposal directs a portion toward rewards paid in the future.
This makes NU7 broader than a block-speed upgrade. It combines changes to transaction timing with an adjustment to the network’s reward structure.
Testing will allow developers to assess those changes together, before deciding whether the full upgrade is ready for mainnet activation.
Another significant change is NU7’s disabling of version 4 transactions. That change affects ZEC held in Sprout, Zcash’s legacy shielded pool.
Funds remaining there would become unspendable through the existing system once NU7 activates on mainnet, unless users move them beforehand.
For affected holders, the distinction between testnet and mainnet is important. The current activation begins testing; it does not mean the proposed restrictions have already taken effect on the live Zcash network.
Nevertheless, the planned mainnet change creates a migration requirement for users with legacy Sprout balances. The final activation height, once selected, will establish when the new transaction rules begin applying to mainnet.
ZEC technical outlook: Zcash could revisit $1,100 support if recovery fails
The ZEC/USD daily chart remains bearish after the coin dropped below $1,300 on Friday. It has since recovered and is now targeting major resistance levels in the near term.
The momentum indicators suggest that the bulls are still in control. The RSI of 58 is above the neutral 50, while the MACD lines are still in positive territory.
If the recovery continues, ZEC could extend its rally towards the Inducement Liquidity (ILQ) at $1,505.
An extended bullish run would allow ZEC to reclaim the recent high of $1,701 over the next few days.
However, if the bears regain control, the first major support lies at the weekend low of $1,254. Failure to defend this level could see ZEC drop lower towards the $1,100 psychological support.
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