ZCash Faces a 53% Drop in Two Weeks: Is This the End of an Explosive Cycle?

ZCash has seen a dramatic decline of 53% over the past two weeks after a remarkable price surge earlier this year. Rising interest in privacy-focused cryptocurrencies led to a rally starting in September, pushing its value up by an incredible 1,838.5%. However, recent market trends and pivotal support levels suggest that this bull run may have come to an end. This article explores ZCash's technical indicators, current price levels, and potential future movements in the context of the cryptocurrency market.

Key Takeaways

Recent Performance: ZCash's price skyrocketed by 1,838.5% from a low of $38.69 in September to a high of $750 in November before dropping 53%.
Market Sentiment: A decline in Bitcoin's value and bearish sentiment across the market may have contributed to ZCash's downturn.
Technical Analysis: Current analysis shows indicators pointing towards short-term bearishness, while certain Fibonacci levels suggest potential support for future rallies.
Support and Resistance: Key resistance is noted at the $400-$420 levels, while $315-$321 could be a significant support zone to watch closely.

ZCash drops 53% in two weeks - Is this the end of an explosive cycle?

Price Surge and Subsequent Decline

ZCash 1-day Chart

ZCash has been a standout performer in recent months. The price surged sharply in September and October, fueled by increased interest in privacy-oriented cryptocurrencies. From a low of $38.69 in September to a peak of $750 in November, this represented a staggering return of 1,838.5% in less than 10 weeks. However, the decline in Bitcoin's price and broader market sentiment seems to have halted ZCash's momentum, with a significant 53% drop in just two weeks.

Long-Term Outlook versus Short-Term Challenges

ZCash 1-hour Chart

The recent bearish trend is noticeable on the 1-day charts, where a breach of higher low at $470 signifies a shift. A drop below the swing low at $424 indicates the beginning of a retracement phase. Though the situation appears troubling, the Fibonacci retracement levels have not been completely breached, indicating that the rally might not be over yet. In contrast, the hourly chart reveals bearish conditions, suggesting limited potential for a bounce back, with the $400-$420 zone acting as a supply region.

Technical Analysis of ZCash

The Momentum Flow Index (MFI) indicators across both timeframes indicate that sellers are currently in control, with a bearish shift noted on the daily chart as the MFI dips below 20. This trend is supported further by the On-Balance Volume (OBV), which, while not showing a drastic fall on the daily chart, is trending downward on the hourly timeframe, reinforcing the notion of a retracement phase.

Critical Support and Resistance Levels

Currently, the $400-$420 price range shows strong resistance. Support appears to be holding at $315-$321; however, it may not last much longer. Should the price close a daily session below $315, it could signal further selling pressure, with a potential decline towards the next Fibonacci retracement support around $197.

Conclusion

ZCash's recent price actions raise questions about its future trajectory following significant gains earlier in the year. While current indicators suggest a bearish outlook in the short term, technical levels provide potential support, indicating the possibility of a market rebound.

Disclaimer: This article does not serve as financial advice and solely reflects the writer's opinion.