Zcash (ZEC) Faces Market Setback with 24% Drop; Analysts Caution About Potential Future Declines

As the cryptocurrency market experiences a downturn, Zcash (ZEC) kicks off December with a significant one-day decline, leading the way in losses among major cryptocurrencies. Although some analysts believe that the altcoin is gearing up for a substantial move, others caution that it may face another major price correction in the weeks ahead.

Key Takeaways

Zcash (ZEC) has initiated December with a significant drop, losing approximately 24% of its value and leading the losses in the crypto market.
It lost crucial support levels, hitting a low of $328 after reaching an all-time high of $750 in early November.
Analysts are divided; some suggest potential for recovery while others warn of further downturns, predicting a possible drop to the $200 range.
Despite the recent correction, some experts believe Zcash remains strong in the long term due to its unique focus on privacy.

WIF, crypto, memecoins, Solana, Zcash

Zcash Faces Major Support Losses Amidst Market Decline

Following a correction in the market late Sunday, Zcash has lost critical support levels, reaching one-month lows. Over the last three months, the cryptocurrency enjoyed a remarkable rally, soaring over 1,775% to a record high (ATH) of $750 in early November.

Since this peak, the altcoin has traded within the $440-$720 range, fluctuating between the upper and lower limits due to recent market volatility. However, the pullback at the end of November caused ZEC’s price to fail at retesting this vital support area, closing below it for the first time in nearly a month.

Once it lost this zone, Zcash's price continued to fall below other key support levels, breaking the $400 barrier and hitting a local low of $328 on Monday morning before recovering back to around $340.

Some market analysts have raised concerns that the altcoin could be in for more trouble, indicating further price drops might occur in the upcoming weeks. Sjuul from AltCryptoGems noted that ZEC has seen the largest weekly and daily price declines, with drops of 40.2% and 24%, respectively.

The analyst had previously highlighted that the cryptocurrency's uptrend lost momentum after falling below the EMA200, describing it as "a perfect bearish retest followed by a strong rejection" last week. Consequently, Sjuul has suggested that without reclaiming this crucial moving average, Zcash could be heading towards further declines in support levels.

Similarly, another analyst, Altcoin Sherpa, believes ZEC could plummet another 30%-40% to the $200 range after losing the critical $440 support. However, he also mentioned that the price might experience short-term recoveries during this retracement.

Is ZEC’s Correction a Cause for Concern?

Mert Mumtaz, co-founder and CEO of Helius, stated that a correction following a massive 700% rally is “normal,” adding that the privacy token “looks great” on higher timeframes. Importantly, the cryptocurrency still showcases substantial gains of 700% and 485% over the past three months and the last year, respectively.

The CEO emphasized Zcash's strengths by highlighting that "privacy is not just a narrative; private money is the entire purpose of crypto," suggesting that the altcoin is set to compete with other leading cryptocurrencies like XRP in the future.

Meanwhile, another analyst operating under a pseudonym believes Zcash is gearing up for a significant move despite the ongoing correction. According to X analyst Make Sense, the cryptocurrency is at a critical level after falling to the $320 mark, its first key support area beneath the November trading range.

If ZEC can maintain its current range, it might regain its recently lost ground and bounce back to the $500-$600 mid-range. Conversely, a failure to hold onto these levels could see the cryptocurrency retest the $280 and even the $200 area, he noted, before a potential trend reversal.

"This is where market makers determine the next direction: an early bounce leading to a mid-range rally or a deeper decline resulting in a full trend reversal. Either way, volatility is about to increase," he explained.

As of now, Zcash is trading at $338, marking a 20% decline over the monthly timeframe.

Zcash, ZEC, ZECUSDT
ZEC’s performance over the one-week chart. Source: ZECUSDT on TradingView