FUNDAMENTAL OVERVIEW
The idiosyncratic catalysts pushing up Zcash have been exhausted and the
cryptocurrency is now at the mercy of macro and geopolitical developments. The
focus is mainly on the Middle East situation.
The US
and Iran remain engaged in negotiations over Iran’s recent proposal to reopen
the Strait of Hormuz. The disagreement reportedly now centres more on the
sequencing of the steps rather than the substance of the proposal.
Iran’s
government spokesperson said yesterday that Foreign Minister Araghchi had
presented a “US proposal” to the cabinet, although no further details were
provided. Traders will therefore continue to closely monitor the headlines for
any signs of progress.
Fed’s
Williams provided some support to the crypto market recently, saying that he
saw no urgency to move again after the September hike and that one additional
hike would likely be enough if the economy develops as expected. His comments
triggered a dovish repricing, with the odds of an October rate hike falling
from 70% to 45%.
The
softer than expected US Core PCE data also pushed October hike expectations
lower. However, it is worth keeping in mind that much of the downside surprise
was driven by the BEA’s annual methodological update and revisions. The agency
changed the way some prices are constructed, and economists had warned
beforehand that these changes could materially lower reported core PCE. As a
result, the report was not a game changer for the inflation outlook.
Looking
ahead, US-Iran developments will likely remain the main focus. A breakthrough
in negotiations would be positive for Zcash, as it would trigger a further
unwinding of aggressive Fed rate hike expectations. Conversely, a prolonged
stalemate or a deterioration in the situation could continue to weigh on risk
sentiment and keep a lid on the broader crypto market.
ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the
daily chart, we can see that Zcashis testing the major upward trendline
again. We can expect the buyers to step in around the trendline, with a defined
risk below it, to position for a rally into the 2,000 level. The sellers, on
the other hand, will want to see the price breaking lower to pile in for a drop
into the 1,031 level next.
ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4
hour chart, we might have formed a tight range between the 1,360 support and 1,490
resistance. The market participants will continue to play the range by buying
at support and selling at resistance until we get a breakout on either side.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1
hour chart, we have a downward trendline defining the recent pullback into the
major upward trendline. If we get a bounce, the sellers will likely lean on the
downward trendline, with a defined risk above it, to keep targeting a break
below the major upward trendline. The buyers, on the other hand, will look for
a break higher to increase the bullish bets into new highs, targeting a break
above the resistance.
UPCOMING CATALYSTS
Todaywe get the US ISM Manufacturing PMI and the latest US
Jobless Claims figures. Tomorrow, we conclude the week with the US NFP report.
The focus, though, will remain on US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.