FUNDAMENTAL OVERVIEW
Zcash has
come under heavy selling pressure in recent days, but there hasn’t been a major
negative Zcash-specific catalyst behind the move. In fact, there was a broader
crypto market selloff as rising oil prices, Treasury yields and the US dollar
have pressured risk assets.
In terms
of Zcash-specific news, there were actually some further positive developments during
the selloff. The Winklevoss Asset Services filed an S-1 on October 6 for a
proposed spot Zcash ETF that would hold ZEC directly, with Winklevoss Capital
indicating non-binding interest in purchasing up to $100 million of shares. The
filing adds another potential institutional-demand catalyst following
Grayscale’s existing Zcash ETF.
The other
major catalyst is NU7, Zcash’s upcoming network upgrade. The upgrade went live
on public testnet this week, reducing target block times from 75 seconds to 25
seconds and introducing a Network Sustainability Mechanism. Developers are
targeting November 5 for mainnet activation, with a final activation decision
expected on October 20. Successful testing should strengthen the fundamental
narrative around Zcash, while technical problems or delays could have the
opposite effect.
Therefore,
the current weakness looks more like macro pressure and a correction following
an exceptionally strong rally than a deterioration in Zcash’s fundamental story.
The key near-term catalysts are the October 20 NU7 activation decision, the
potential launch process for the Winklevoss ETF and the November 5 mainnet
upgrade.
However,
ZEC remains highly sensitive to broader crypto liquidity, so continued pressure
from oil, yields and the dollar could keep overwhelming these idiosyncratic
catalysts in the short term.
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
Todaywe get the latest US Jobless Claims figures. Tomorrow, we conclude
the week with the University of Michigan Consumer Sentiment survey. The focus,
though, will remain on US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.