Zcash, and
many other cryptocurrencies, whipsawed today as the Democrats’ victory in both
the House and the Senate initially weighed on the crypto market before a strong
rebound.
I’m not
entirely sure about the reasons behind the rebound, as the main implication of
a Democratic Congress is greater fiscal restraint. It won’t limit Trump’s power
to impose tariffs or continue the war with Iran.
This
should be a net negative for the growth outlook and, consequently, risk
sentiment, unless the US-Iran war finally comes to an end.
Zcash
does, however, have a specific bullish catalyst in the form of the upcoming NU7
network upgrade, scheduled for tomorrow. The upgrade will reduce block times
from 75 to 25 seconds, making transactions significantly faster and improving
network efficiency. This could provide additional support for ZEC, although it
doesn’t change the broader macro picture and it might also be already priced in.
The
market might also be reacting to lower Treasury yields and a weaker US dollar,
but this is mostly due to overcrowded positions getting unwound as the fiscal
impulse becomes less favourable.
Looking
ahead, the focus will remain on US-Iran negotiations. A diplomatic breakthrough
would be positive for Zcash through improving growth expectations and risk
sentiment, while a successful network upgrade could provide an additional Zcash-specific
catalyst. An escalation of the conflict, on the other hand, would likely
trigger another selloff as growth concerns and safe-haven flows would weigh on
risk assets.
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, there’s not much we can glean from this timeframe given the choppy
price action. The sellers will have a better risk to reward setup around the
resistance, while the buyers will need a breakout to open the door for new
highs.
ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor upward trendline defining the bullish momentum. If we get a
pullback, we can expect the buyers 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 increase the bearish bets into new lows. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe have the US ADP and the US ISM Services PMI. Tomorrow, we get the
latest US Jobless Claims figures. 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.