Upside Break on the Way? Zcash Eyes Gains Against Bitcoin
Privacy-focused cryptocurrency zcash is solidly bid against the dollar and could soon see a spike against bitcoin.
As per data source CoinMarketCap, zcash (ZEC) has appreciated by 12 percent in the last 24 hours. As of writing, it is trading at $718 levels – that’s down 24.83 percent from the lifetime high of $955.26 set on Jan. 7, but, week-on-week, the cryptocurrency is up 22 percent.
ZEC’s retreat from the record high of $955.26 could be associated with overbought technical conditions and broad-based drop in cryptocurrency prices due to fears of trading restrictions in South Korea. Prices hit a low of $601.87 on Monday, and have since struggled to extend gains above $730 levels.
That said, the price chart indicates an upside break could happen soon.
The above chart (prices as per Bifinex) shows:
- Strong dip demand below $600 as shown by candles with long tails (gap between intraday low and close).
- A series of higher lows (as represented by rising trend lines) indicates bulls are in control.
- 10-day moving average (MA) carries a bullish bias (sloping upwards).
- The RSI is holding above 50.00 (bullish territory).
- A break above $732.78 (yesterday’s high) would add credence to above listed bullish factors and open doors for retest of $800. Further gains towards $1,000 cannot be ruled out in the short-term, given the RSI is well short of the overbought territory.
- On the downside, only a close (as per UTC) below $571.18 (Jan. 11 low) would signal a bullish-to-bearish trend change.
As of writing, ZEC is trading at BTC 0.05. The above chart (prices as per Bittrex) shows a long-term bullish trend reversal:
- A breach of the descending trendline followed by an inverse head-and-shoulders breakout (bullish reversal pattern).
- The 50-day MA has bottomed out.
The fact that ZEC witnessed an inverse head-and-shoulders breakout at the bottom of the long-term downtrend adds credence to the argument a long-term bullish trend reversal has been confirmed.
- ZEC looks set to test BTC 0.0749 (38.2 percent Fibonacci retracement) in the short-run, and may even extend gains to BTC 0.10.
- Short-term overbought conditions may yield a pullback, though the outlook would remain bullish as long as prices hold above the 50-day MA (currently seen at BTC 0.0337).
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Zcash Company, the for-profit entity that develops the zcash protocol.