Zcash has
experienced significant volatility recently, with the rally initially supported
by growing institutional interest and several ecosystem-specific catalysts.
Paradigm disclosed its investment in Zcash and described the cryptocurrency as
a potential private complement to Bitcoin, providing a significant boost to
sentiment. The launch of 21Shares’ first European Zcash ETP and renewed inflows
into Grayscale’s Zcash ETF further strengthened the institutional adoption
narrative.
However,
profit-taking and ETF outflows weighed on the cryptocurrency following its
strong rally as macro headwinds started to bite. Inflation risks, growth
concerns, Fed rate hikes, geopolitical uncertainty and AI-related woes weighed
on risk sentiment. More recently, Zcash dropped following the news of the Binance security breach, which reportedly
resulted in approximately $6.3 billion being drained from multiple wallets.
Historically,
cryptocurrency selloffs triggered by exchange hacks have often been followed by
a recovery, but the economic context decided how quickly. The initial reaction
tends to be driven by panic, uncertainty and forced liquidations rather than a
deterioration in the fundamentals of cryptocurrencies.
Looking
ahead, the focus will be
on the US-Iran negotiations and the US midterm elections. The risk sentiment
improved a bit over the weekend as Iran proposed a two-day framework to reopen
the Strait of Hormuz, much shorter than the previous seven-day plan. We will
likely need a breakthrough in US-Iran negotiations or dovish Fed comments,
though, to change the current bearish trend.
A surprising red
sweep in US midterm elections could also support Zcash as markets could reprice
the expected fiscal restraint. A blue sweep, on the other hand, could put
further pressure on the crypto market if there’s no resolution to the Iran war.
ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the
daily chart, we can see that Zcashis approaching a major
resistance zone around the 1,380 level. If the price gets there, we can expect
the sellers to step in, with a defined risk above the resistance, to position
for a drop into the 1,031 support. The buyers, on the other hand, will want to
see the price breaking higher to increase the bullish bets into the 1,692 level
next.
ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4
hour chart, we have an upward trendline defining the bullish momentum. The
buyers will likely continue to lean on the trendline, with a defined risk below
it, to keep pushing into new highs. The sellers, on the other hand, will look
for a break lower to pile in for a drop into the 1,031 support next.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will likely wait for the price to come
into the resistance or break below the trendline, while the buyers will look
for a break above the resistance or a bounce around the trendline. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Today we have the US ISM Manufacturing PMI. Tomorrow, we have the US Job
Openings data and the US midterm elections. On Wednesday, we have the US ADP
and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims
data. On Friday, we conclude the week with the US NFP report and the University
of Michigan Consumer sentiment survey.
This article was written by Giuseppe Dellamotta at investinglive.com.