Nov 28, 2024

6thTrade

Zcash [ZEC] has emerged as a top market gainer, rallying 12% in the past 24 hours to trade at $54.40. With its market capitalization climbing to $886 million, the altcoin is closing in on the significant $1 billion milestone.

Over the past 30 days, ZEC has surged by 48%, reflecting the robust November performance seen across Bitcoin [BTC] and other altcoins. However, as the broader crypto market begins to show signs of retracement, can Zcash sustain its momentum, or will bearish sentiment take hold?

Technical Analysis: Ascending Parallel Channel

On the one-day chart, Zcash is attempting a breakout from an ascending parallel channel, facing significant resistance at the upper boundary. However, increasing trading volume, as indicated by the volume histogram, suggests the potential for sustained upward movement.

Key Indicators Supporting the Bullish Trend:

  1. Money Flow Index (MFI):

    • With an MFI value of 73, ZEC is experiencing strong buying pressure.

    • The MFI remains below overbought territory, signaling room for additional gains.

  2. MACD (Moving Average Convergence Divergence):

    • The MACD line trending above the signal line, along with positive histogram bars, confirms bullish momentum.

Should ZEC break out of the ascending channel, it may attract traders looking to hold or add to their positions. The next target lies at the 1.618 Fibonacci level ($77). Conversely, failure to breach resistance could see the price retest a key support level at $44.

Derivatives Market: Open Interest at a 19-Month High

Source: Coinglass

Zcash’s price surge has sparked growing interest among derivatives traders. Open interest has risen 47% in the past 24 hours to reach $39 million, marking its highest level since April 2022.

  • Implication: Rising open interest aligns with price gains, indicating traders are increasingly opening new positions on ZEC. This is a bullish signal that reflects confidence in the ongoing uptrend.

Liquidation Heatmap Insights

Zcash’s liquidation heatmap reveals the dynamics of leveraged positions during its price rally:

  1. Short Liquidations Fuel Uptrend:

    • The forced closure of leveraged short positions accelerated buying activity, pushing ZEC higher.

  2. New Liquidation Zone:

    • The nearest liquidation zone is now below the current price at $51.

    • A dip to this level could trigger forced selling from long liquidations, potentially driving prices lower.

To sustain the uptrend, buyers must step in to defend the $51 support level, preventing the market from slipping into bearish territory.

Outlook: Bullish Momentum or Retracement?

Zcash's recent rally is underpinned by strong technical and market indicators, suggesting the potential for continued gains. Key levels to watch:

  • Resistance: Breakout above the upper boundary of the ascending channel could drive ZEC to $77.

  • Support: Failure to break resistance may lead to a retest of $44 or a dip to the $51 liquidation zone.

Whether ZEC extends its gains or succumbs to bearish pressure depends on maintaining strong buying activity and defending crucial support levels.