FUNDAMENTAL OVERVIEW
Zcash has been rallying
strongly since August after the Grayscale’s Zcash ETF (ZCSH) began trading on
NYSE Arca, giving investors direct ZEC exposure through traditional brokerage
accounts. Historically, ETFs for cryptocurrencies have been bullish catalysts
as they attracted more capital inflow.
Zcash is also increasingly
being positioned as a scarce, Bitcoin-like asset with optional transaction
privacy. Its 21 million supply cap and Proof-of-Work model strengthen the
comparison with Bitcoin, while its privacy functionality differentiates it from
BTC.
There was also an improvement in protocol security in July as the NU6.3/Ironwood
upgrade replaced the old Orchard shielded pool with a new pool designed to
improve supply integrity and security.
The combination of a US-listed ETF and improving protocol security has
substantially changed ZEC’s investment story. It is no longer simply a niche
privacy coin, but increasingly an institutional-accessible bet on the privacy
segment of crypto.
CLARITY ACT VOTE
Looking ahead, we have
the cloture vote on Clarity Act today at 2:15pm ET where 60 votes are needed to
support opening debate on the legislation. As a reminder, the legislation seeks
to provide the US crypto industry with a more defined regulatory framework. Greater
regulatory clarity would be positive for the crypto market. If successful, the
legislation could pave the way for stronger institutional participation, deeper
market liquidity and additional capital entering the crypto market.
A failed vote could close
the legislative window for crypto market structure this year, given the
November midterms. This outcome would likely be negative for Zcash and could
trigger a selloff. But even a successful vote may not be positive. With the
FOMC decision coming tomorrow, I’m afraid we could see a “sell the fact”
reaction as traders shift their attention from the Clarity Act back to monetary
policy and the negative macro picture.
ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we
can see that Zcash has
recently bounced from a major upward trendline. If we get another pullback into
the trendline, we can expect the buyers to step in with a defined risk below
the trendline to keep targeting new highs. The sellers, on the other hand, will
look for a break lower to pile in for a drop into the 752.00 swing low next.
ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we
have a resistance zone around the 1,220 level where the price got rejected from
a couple of times in the past week. If the price gets there, we can expect the
sellers to step in around the resistance with a defined risk above it to target
a break below the trendline. The buyers, on the other hand, will want to see
the price breaking above the resistance to pile in for a rally into new highs.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor support zone around the 1,115 level where we got a few rejections
in the past week. We can expect the buyers to step in there with a defined risk
below the support to target a rally into the 1,220 resistance. The sellers, on
the other hand, will look for a break to extend the pullback into the major trendline.
UPCOMING CATALYSTS
Today, we have the cloture vote onCLARITY Act.
Tomorrow, we have the FOMC rate decision. On Thursday, we get the US Jobless
Claims figures. Traders will also keep a close eye on developments in the
Middle East.
This article was written by Giuseppe Dellamotta at investinglive.com.