Will Zcash (ZEC) Continue Its Rally or Face a Pullback?
The cryptocurrency market is buzzing with excitement as Zcash (ZEC) experiences a 15% price surge over the weekend. Sitting at $518 at the time of writing, many investors are asking: will Zcash break through its resistance levels to climb toward $600 or retrace for a short-term cooldown?
What Are the Signals Telling Us?
Technical indicators have created a mixed outlook for Zcash, with some suggesting that a short-term pullback may occur before a larger upward trend. Here’s what we’re observing:
Hidden Bearish Divergence on the RSI
On Zcash’s 12-hour price chart, hidden bearish divergence is evident. This occurs when the Relative Strength Index (RSI), which measures market momentum, climbs upward, but the price of the asset posts lower highs. Such divergence often indicates waning buying pressure, potentially signaling an upcoming pullback.
Money Flow Index (MFI) Shows Weak Demand
Another critical indicator to watch is the Money Flow Index, a tool used to measure retail buying strength. Between December 12th and December 28th, Zcash’s price increased, but the MFI declined, highlighting that demand is not keeping pace with price growth. Unless the MFI rises above 65, Zcash’s momentum may struggle to sustain itself in the short term.
Whale Behavior Indicates Caution
On-chain metrics reveal cautious whale activity. While small-scale retail investors pushed prices upward, larger wallet holders (whales) have reduced their balances on the Solana chain by 7.46% in the past day. These sell-offs signal that some whales may be locking in profits or waiting for a better re-entry point.
However, the top 100 Zcash addresses (also known as mega whales) have increased their holdings by 4.59%, suggesting long-term optimism remains intact.
Key Levels to Watch
Resistance is currently sitting at $527. A 12-hour close above this level will likely confirm bullish momentum and open the door to a potential rally toward $633—an approximate 22% increase from today’s value. The next target after $633 would be $737 if buyers continue to push prices higher.
On the downside, crucial support stands at $435. If Zcash breaks below this threshold, prices could further decline to $370, with broader market volatility determining the depth of the retrace.
Expert Investing Tips
Given year-end liquidity challenges and market uncertainties, exercise caution when making investment decisions. It’s important to rely on technical level confirmations to avoid risks. For those looking to stay updated, subscribing to daily crypto newsletters, such as BeInCrypto’s Daily Insights, can provide more in-depth market analysis.
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Want to optimize your crypto trading strategies? Consider using the Ledger Nano X, a secure hardware wallet for managing your Zcash and other cryptocurrencies. Its state-of-the-art security features and intuitive design make it a must-have for both novice and expert traders.
Final Takeaway
As Zcash’s price hovers near $518, the market remains at a crossroads. Traders must navigate carefully, watching key resistance and support levels for signs of confirmation. While the short-term outlook may appear cautious, the long-term sentiment remains positive for Zcash, especially among mega whales. As always, remember to conduct thorough research and consult with a financial advisor before making any decisions.
