Zcash activates NU7 testnet, ZEC targets $1,505 but risks $1,100 support

NU7 upgrade rolls out on testnet

On October 4, the Zcash testnet explorer ZecBlock showed that the designated activation block, 4,465,026, was mined at 18:21:45 UTC. Subsequently, the Zcash team confirmed via X (formerly Twitter) that NU7 was live on the testing network.

This activation introduces an important testing period, allowing developers and ecosystem operators to evaluate the new rules in a controlled environment. The current target for mainnet deployment remains November 5, with a final decision on the actual activation height due October 20.

During this period, the project will gather feedback and operational data to ensure the upgrade’s stability before any changes are finalized on the live network.

Faster blocks, new fee mechanism, and transaction changes

NU7’s headline feature is reducing the target block interval from 75 seconds to 25 seconds. Since blocks on Zcash are batches of user transactions, this adjustment aims to improve transaction confirmation times and enhance network responsiveness.

While the new interval is set at one-third of the existing standard, block creation times can still vary due to network conditions and mining luck. This testnet phase is intended to help network operators observe the effects of faster block production before similar changes are introduced to the live network.

With NU7’s activation, developers and infrastructure operators have a window to evaluate the upgrade’s performance ahead of planned mainnet deployment, particularly monitoring how faster block intervals and new fee mechanisms impact transaction processing and mining rewards.

NU7 also brings a Network Sustainability Mechanism that reallocates a portion of transaction fees, channeling some instant payouts to be distributed as future block rewards instead of rewarding all fees immediately to miners.

This shift creates an incentive structure aiming to sustain the network over time and introduce a broader set of changes beyond only reducing block times.

Mini dictionary: Network Sustainability Mechanism: A feature designed to reallocate some transaction fees into future mining rewards to support the long-term operation of the network.

Another significant change within NU7 is the disabling of version 4 (v4) transactions, which affects funds still held in the Sprout pool, Zcash’s original shielded address protocol. Once NU7 is activated on the mainnet, any ZEC remaining in Sprout addresses will become unspendable unless users take action and move their funds beforehand.

It is important for affected holders to differentiate between the testnet and mainnet timelines, as the restrictions only become active after mainnet upgrade. The final activation height chosen will determine the moment these rules take effect on the live blockchain.

ZEC price outlook: Bulls and bears in focus

On the technical side, the ZEC/USD daily chart signals caution despite the recent recovery above $1,300. The Relative Strength Index (RSI) remains at 58, signaling bullish momentum, and the MACD is positioned in positive territory.

If this upward momentum holds, ZEC could target the Inducement Liquidity (ILQ) level at $1,505 as the next major resistance. In an extended rally, the price may revisit the recent high of $1,701 within a few days.

However, a reversal in sentiment could push ZEC back toward support at $1,254. If this level fails to hold, the next psychological support is set near $1,100, underscoring the coin’s vulnerability should bearish forces intensify.

ZEC’s status around the $1,330 mark hinges on whether buyers can maintain recovery momentum or if bears will drive the price toward the $1,100 support zone.