Journalist
Published:
ZCash (ZEC) saw a 6.68% decline over the past week, but there was near-term upside potential for the privacy token. A Bitcoin (BTC) price movement beyond the $70,000 local supply zone would also contribute to near-term market-wide sentiment.
AMBCrypto reported that ZEC was facing a significant capital flight from the perpetual market, amounting to $52 million. The large liquidations of the past month have highlighted the frequent volatility of prices.
The growth in the offer and protected transactions constitutes a positive long-term development which has consolidated the discourse on the protection of privacy. In the short term, the reaction from the long-term support at $187 has been encouraging for the bulls.
Why a bounce to $357 is likely
Source: ZEC/USDT on TradingView
On the daily chart, the RSI was sitting at a slightly bearish reading of 43. The OBV failed to make significant new highs in February and was falling back towards local lows. Together, they showed why traders should remain bearish.
Yet these indicators are inherently lagging. The price action told a different story.
The imbalance (white box at $250) and former local resistance at $251 (orange) have been tested and defended over the past two days. The reaction to $187, long-term support, was followed by a brief rise to $320 which has since retreated.
Still, it is possible that the current move could extend beyond $320.
The Short-Term Bullish Case for ZCash
Source: ZEC/USDT on TradingView
Zooming in on the H4 structure, we can see that it reversed bullishly after reclaiming $251 as support. This level was a local supply zone two weeks ago.
Even though the dominant swing structure was indeed bearish over this period, the current price action leaves room for a deeper upward retracement before the primary bearish movement can continue.
The 61.8% and 78.6% Fibonacci retracement levels represent a golden zone for traders to enter the market. Even though trading volume is low, traders may be wary of a ZCash rally to $320 and $357.
Traders can look for a low-risk long position ranging from $260 at these resistance levels. Alternatively, they can wait for a rejection starting at $357 to become a seller.
Final summary
- The long-term narrative for ZCash was well entrenched and the defense of $187 support reinforced the idea of a ZEC comeback.
- We do not know how far this rebound will go. For now, traders can benefit from a conservative outlook and not expect the rebound to break lower time structures.
Disclaimer: The information presented does not constitute financial, investment, business or other advice and represents the opinion of the author only.
