ZCash fell 3.82% in the last 24 hours, following Bitcoin’s drop to the low of $87.5k.
While Bitcoin [BTC] managed to bounce higher, ZCash [ZEC] was unable to reverse recent losses.
In a recent report, AMBCrypto noted that a rally to $605 was expected after a breakout of a descending channel. Another report noted that as long as the $382-$395 demand zone is defended, there is a possibility of a ZEC rally.
As things stand, the bullish momentum has slowed in recent days, but has not calmed down.
There is still a possibility of a ZCash recovery. However, the entire market sentiment is weighing on altcoins.
The poor performance of the privacy sector, with Monero [XMR] and script [DASH] A drop of 0.89% and 14.5% in the last four days helped explain ZCash’s performance.
ZCash continues to defend $400 support
Source: ZEC/USDT on TradingView
On the daily chart, the move beyond the local high of $409.3 on December 9 confirmed a bullish structure change. Furthermore, the $410 area was an imbalance in the same period in late November.
Highlighted in white, the imbalance has served as an area of stable demand in recent days.
The OBV has started to rise and the RSI signaled that the momentum was changing as well.
Source: ZEC/USDT on TradingView
Bearish structure and momentum are observed on the 1-hour chart. The OBV also showed increased selling pressure since Friday, December 12.
Chances of a breakdown under $400?
So far, the psychological support at $400 has held well, but multiple tests of the same level weaken it.
Over the past week, this support has been tested three times. Given the lower selling pressure on the time frame, a breakout was possible.
Traders’ call to action: wait for THIS trigger for long positions
It is best to allow the lower time frame to align with the trend of the higher time frame before attempting to trade in the direction of the trend. In the current case of ZEC, a move above the local resistance of $425 and a retest of the same would offer a buying opportunity.
Traders may try to remain neutral until market-wide sentiment and Bitcoin capital inflows improve, as BTC faced huge selling pressure recently.
Final thoughts
- ZCash failed to overcome the resistance at $480 and has retreated towards the psychological support at $400.
- ZEC bulls are likely to have more success in the near term, provided the $425 supply zone is broken.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.