ZCash (ZEC) has recently shown promising bullish momentum, rebounding from a critical long-term support level and overcoming significant resistance. This surge has sparked optimism among traders, despite lingering uncertainties in the broader crypto market, particularly concerning Bitcoin's performance. A closer look at ZEC's technical indicators reveals a nuanced short-term outlook, balancing potential further gains with signs of an impending correction.
ZEC's Recent Surge and Critical Levels
ZEC demonstrated robust strength by rebounding from its long-term support at $187.9 and decisively surpassing the $300 resistance level. This impressive rally saw ZCash gain nearly 10% in a single day, accompanied by a substantial 25% increase in daily trading volume, signaling strong buying interest. However, significant overhead threats loom at the $365-$460 supply zone. On the lower timeframes, immediate local resistances are identified at $320 and $357, derived from Fibonacci retracement levels. Should the price retrace, key support zones lie around $300, $260, and $240, where previous price movements have left behind imbalances or fair value gaps.
Technicals Suggest Further Upside, With Caution
While the On-Balance Volume (OBV) has registered new monthly highs, indicating accumulation, both the Relative Strength Index (RSI) and Stochastic RSI are flashing overbought conditions. This suggests that a short-term correction might be on the horizon. Despite this, ZEC's forceful breakout past $300 created a significant imbalance, which is likely to act as a magnet for price, potentially holding as support during any dips. Furthermore, analysis of the liquidation map reveals substantial cumulative short liquidation leverage around the $342 and $360 regions. As price often gravitates towards areas of high liquidity, this strongly suggests a push towards these higher targets is more probable in the coming days than a deep fall below $300.
The Bitcoin Factor
Despite ZEC's individual bullish signals, the broader market context, particularly Bitcoin's performance, remains a critical determinant. Bitcoin recently tested the $70,000 resistance level, and a potential rejection could trigger a market-wide downturn. Such a scenario would undoubtedly drag ZEC lower, negating its short-term bullish potential. Therefore, while ZEC appears poised for further upward movement, contingent on reclaiming the $300 level as solid support, traders are advised against FOMOing into long positions. A sustained move to $360 is more likely than a breakdown below $300, but only if Bitcoin avoids strong selling pressure in the immediate future.
