ZCash Maintains Ground Above $400: Will ZEC Outperform as Bitcoin Demand Declines?

ZCash, the cryptocurrency known for prioritizing privacy, has surged again, registering an 8.4% increase over the past 24 hours. This upward movement can be attributed to a mix of technical advancements and promising developments within its ecosystem.

Key Takeaways

ZCash has rallied 8.4% in 24 hours, supported by technical and ecosystem developments.
Demand for Bitcoin and Ethereum has been declining, impacting investor sentiment towards ETFs.
ZCash's defense of the $400 support level is a positive indicator, though caution is warranted due to capital outflows and weakening momentum.
A breakout above $476 could signal sustained bullish momentum, while dips below $404 might indicate bearish trends.

Disclaimer: The information provided does not constitute financial, investment, trading, or any other type of advice and is solely the opinion of the writer.

ZCash maintains ground above $400: Will ZEC outperform as Bitcoin demand declines?

As ZCash seems poised for an end-of-year rally, the trend isn't mirrored in Bitcoin [BTC] and Ethereum [ETH], where exchange-traded fund (ETF) flows indicate a downturn in demand. Recent data shows that interest in BTC and ETH has diminished over the last six weeks. In contrast, ZCash is expanding its token utility, providing holders with new yield opportunities. The resilience of ZCash in maintaining support around the $400 mark has been encouraging. AMBCrypto delves into whether the conditions are right for swing traders to consider going long.

ZCash: Maintaining a Bullish Outlook

ZCash 3-day Chart

Source: ZEC/USDT on TradingView

Looking at the 3-day chart reveals a bullish swing formation. Despite a retracement to the 61.8% Fibonacci level around $315 towards late November, the internal structure remains intact without flipping bearish. However, the Chaikin Money Flow (CMF) indicator indicates significant capital outflows, posing a concern for buyers. Additionally, the Moving Average Convergence Divergence (MACD) suggests a decline in momentum over the past month, even as ZEC managed to hold the crucial $400 psychological threshold.

If ZEC surpasses its recent swing high of $476, it would confirm a continuing bullish trend, with subsequent price targets set at $600 and $750.

The Risk of a Bearish Shift

Weaker buying pressure combined with diminishing bullish momentum signals to swing traders that falling below the $400 mark could be a genuine risk. A decline beneath $371 would serve as the first clear warning that ZEC prices may slip toward $300 or lower.

Trader’s Recommendations – Is It Time to Invest in ZEC?

ZCash 4-hour Chart

Source: ZEC/USDT on TradingView

On the 4-hour chart, ZCash once again displays a bullish structure. The $400 support level appears to be holding strong. Although the technical indicators are not entirely bullish within this timeframe, current price action offers potential entry points for long traders.

The $450 range is identified as a short-term resistance, and a further dip from this area could be observed. The imbalance located between $416 and $434 (illustrated with a white box) may soon act as a demand zone. Falling below $404 would invalidate this bullish setup, and a persistent drop below $371 would prompt swing traders to reconsider their positions towards a bearish outlook.