FUNDAMENTAL OVERVIEW
Zcash rallied
by more than 45% this week on a couple of key idiosyncratic catalysts. The
community’s NU7 governance vote overwhelmingly supported keeping Bitcoin-style
halvings while reducing block times to 25 seconds. That provided additional
clarity around Zcash’s monetary policy and upcoming network upgrade.
But the
most significant news was Paradigm disclosing that it owns ZEC, with co-founder
Matt Huang describing Zcash as a privacy-focused complement to Bitcoin. The
disclosure came alongside confirmation that Paradigm is also an investor in the
Zcash Open Development Lab.
Paradigm manages
roughly $12 billion dollars. It’s one of the better-known institutional
investors in crypto and it has backed major crypto projects.
On the
macro side, the Fed delivered a rate hike on Wednesday as widely expected and
projected a less hawkish path for interest rates than the market was pricing.
After the initial overreaction and risk-off, the market got back to senses and
risk assets rallied.
Looking
ahead, I would carefully
watch the situation in the Middle East as $100 oil, rate hikes and elevated
bond yields might put more pressure on Trump to end the war. We might be
already entering a de-escalation phase as Trump called a meeting with Gulf
leaders on Tuesday on the sidelines of the UN General Assembly in New York to
discuss the next steps in the war with Iran. Notably, the Iranian delegation
will be allowed to participate.
A de-escalation would
send oil prices lower, easing inflation and rate hikes concerns and improving
significantly the general risk sentiment, ultimately supporting the crypto
market.
ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the
daily chart, we can see that Zcashbounced from the major trendline and eventually extended
the rally into new highs. 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 1027.00 swing low next.
ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4
hour chart, we can see that the break above the resistance zone around the
1,220 level increased the momentum further as more buyers piled in into new highs.
There’s not much we can glean from this timeframe, so we need to zoom in to see
some more details.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1
hour chart, we have a minor trendline defining the bullish momentum. The buyers
will likely lean on the trendline with a defined risk below the 1440 swing low
to keep pushing into new highs. The sellers, on the other hand, will want to
see the price breaking below the swing low to extend the pullback into the 1324
level next.
UPCOMING CATALYSTS
On Tuesday,
we have the Trump meeting with Gulf leaders and on Wednesday, we get the Flash
US PMIs.
This article was written by Giuseppe Dellamotta at investinglive.com.