Zcash’s
recent selloff has been driven largely by broader crypto-market weakness,
rather than a clear deterioration in its fundamentals.
Rising
oil prices, higher Treasury yields and a stronger US dollar had weighed on risk
appetite before the sentiment improved after Trump ruled out strikes on Iran
before the November elections and triggered a relief rally in risk assets.
The main
upcoming catalyst for Zcash is the NU7 network upgrade. Testing is progressing,
with developers expected to make a final mainnet activation decision on October
20, with November 5 targeted for launch.
The
upgrade aims to reduce block times from 75 seconds to 25 seconds and introduce
changes to the network’s reward and sustainability mechanisms. Successful
implementation could improve the network’s functionality and support sentiment.
A second
potential catalyst is the approval for the new Zcash ETF. On October 6,
Winklevoss Asset Services filed for a proposed spot Zcash ETF, which is 10x
cheaper than Greyscale’s ETF. The approval could give Zcash a boost on expected
demand increase.
On the
macro and geopolitical side, the US-Iran negotiations continue as both sides try
to get enough concessions to accept an eventual deal to reopen the Strait of
Hormuz. On Wednesday, we also have the US CPI report that could trigger big
moves in the markets.
A hotter
than expected core CPI could raise the probabilities of a Fed rate hike in October
and weigh on Zcash, while a soft report will likely give the cryptocurrency a
boost on lower Treasury yields and US dollar.
ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the
daily chart, we can see that Zcashbroke below the major upward
trendline and extended the losses as the sellers piled in to target a drop into
the 1,031 level next. If the price gets there, we can expect the buyers to step
in, with a defined risk below the level, to position for a rally into the 2,000
level. The sellers, on the other hand, will look for a break lower to extend
the drop into the 800.00 level next.
ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4
hour chart, we have a downward trendline now defining the bearish momentum. If
we get a pullback into the trendline, we can expect the sellers to lean on it,
with a defined risk above it, to keep pushing into the 1,031 level. The buyers,
on the other hand, will look for a break higher to pile in for a rally into new
highs, with the 1,500 level as the first target.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will have a better risk to reward setup
around the downward trendline where we have also a good support zone around the
1,280 level. The buyers, on the other hand, will need to wait for a drop into
the 1,031 level or a break above the trendline to start positioning for new
highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
On Wednesday we have the US CPI report. On Thursday, we get the US
PPI, the US Retail Sales and the latest US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.