Zcash Shows Resilience Amid Crypto Market Sell-off
The world of cryptocurrencies is no stranger to highs and lows, but Zcash (ZEC) has stood out recently by maintaining its footing during a widespread market downturn. While the broader market saw significant sell-offs, resulting in nearly $2 billion in liquidations, Zcash managed to weather the storm, holding onto its weekly gain of over 25%. However, the question remains: is the cryptocurrency poised for its next big breakout?
Technical Indicators Provide Mixed Signals
On the 12-hour chart, Zcash has been trading within a rising channel, creating both optimism and caution among investors. The upper trend line of this channel, although relatively weak with just two touchpoints, serves as the key resistance level. For Zcash to maintain its upward trajectory, it will need to overcome several hurdles:
1. On-Balance Volume (OBV)
The OBV indicator, used to measure the demand driving a coin’s price, presented some bearish divergence during the recent sell-off. While the price managed to post a higher low on November 20, the OBV failed to follow suit. This indicated weakening demand. However, the OBV recently bounced back, avoiding a deeper decline. To confirm renewed strength, ZEC’s OBV must breach the 10.09 million mark.
2. Chaikin Money Flow (CMF)
Tracking the inflows and outflows of large wallets, the CMF has been pivotal in assessing Zcash’s strength. Earlier this month, the CMF crossed into positive territory, providing a short-lived momentum boost. Currently, it hovers slightly above the zero line, but experts believe a jump beyond 0.02 could significantly strengthen ZEC’s position for a breakout.
3. Relative Strength Index (RSI)
The RSI, a key momentum indicator, recently flashed signs of fading strength. Between November 10 and 16, the Zcash price made a higher high, while RSI made a lower high, signaling bearish divergence. However, recent moves suggest RSI is once again aligning with ZEC’s price trend, restoring the possibility of bullish momentum.
Breakout Levels to Watch
For bullish investors, two critical resistance levels are in sight: $766 and $978. The $766 mark, representing a trend-based extension zone, remains the immediate hurdle before Zcash can aim higher. If ZEC succeeds in breaking this level, the next target of $978 becomes the focus—a breakout point that could lead to four-digit price levels for the cryptocurrency.
On the downside, support levels are established at $635 and $555. A breach below $555 would push Zcash outside the rising channel, potentially reversing its trend.
Looking Ahead: Could This Be the Right Time to Invest?
Zcash’s ability to hold its ground during a volatile time in the market could make it an attractive option for risk-tolerant investors. However, the indicators emphasize the importance of crossing key thresholds, particularly $766, to confirm its breakout potential.
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Stay updated with the latest cryptocurrency trends, and always conduct thorough research before making financial decisions. The altcoin market is ripe with potential, but it requires careful analysis and vigilance.
Final Thoughts
As Zcash teeters on the edge of a potential breakout, all eyes are on its ability to clear critical barriers. Will it rise above $766 and set the stage for new all-time highs? Or will market pressures push it back below support levels? Only time will tell, but one thing is certain: Zcash remains a coin to watch in the ever-evolving world of cryptocurrency.
