ZCash Traders: Patience Could Reward You – But Only After This Key Move

ZCash has seen a 3.82% decline in the last 24 hours as it struggles to recover from recent losses, largely influenced by Bitcoin's price movements. Despite this, analysts remain hopeful for a potential rally if certain support levels hold. A careful trading strategy is recommended for investors watching the cryptocurrency market.

Key Takeaways

ZCash (ZEC) dropped by 3.82% after Bitcoin's decline to $87.5k.
Analysts predict a potential rally to $605 if critical support levels hold.
The $400 psychological support is crucial and has been tested multiple times.
Traders should wait for a breakout above $425 before entering long positions.

ZCash forced to retrace recent gains, tests $400 support once again - Should you buy now?

Current Market Overview

ZCash has dropped by 3.82% in the past day, following Bitcoin's downturn to around $87.5k. While Bitcoin has managed to make a slight recovery, ZCash has struggled to bounce back from its recent losses. According to AMBCrypto, a significant price increase to $605 is possible if ZCash can break free from a descending channel. Additionally, as long as the $382-$395 demand zone is protected, there remains a chance for a ZEC rally.

Even though bullish momentum has recently slowed, it has not entirely reversed. There is potential for ZCash to recover, although broader market sentiment is influencing altcoin performance negatively. The lackluster showing from other privacy coins like Monero (XMR) and Dash (DASH), which have decreased by 0.89% and 14.5% respectively over the past four days, provides some context for ZCash's current standing.

ZCash's Defense of the $400 Support

ZCash 1-day Chart

Source: ZEC/USDT on TradingView

On the daily chart, ZCash surpassed the local high of $409.3 on December 9, indicating a shift towards a bullish structure. The $410 level was also noted as an area of imbalance from late November, which has served as a stable demand zone recently. With the On-Balance Volume (OBV) trending upward and the Relative Strength Index (RSI) indicating a shift in momentum, ZCash appears to be in a critical position.

ZCash 1-hour Chart

Source: ZEC/USDT on TradingView

However, the one-hour chart reveals bearish momentum and structure, with the OBV indicating increased selling pressure since December 12.

Evaluating the Risk of Breakdown Below $400

Currently, the $400 psychological support level has shown resilience, but repeated tests can weaken it. This support level has been challenged three times in the past week, raising concerns about a potential breakdown due to continued selling pressure in shorter timeframes.

Trader's Strategy: Wait for a Set Trigger Before Buying

It is advisable for traders to wait for alignment between lower and higher timeframes before trading in the direction of the trend. In the case of ZCash, a price move above the $425 local resistance, followed by a retest, would signal a good buying opportunity. Meanwhile, maintaining a neutral position could be wise until overall market sentiment and Bitcoin inflows indicate improvement, especially since BTC is currently experiencing significant selling pressure.

Final Notes

Disclaimer: The information provided in this article is not financial advice, trading advice, or investment advice; it reflects the author's opinion only.