Zcash (ZEC) Experiences a Significant Decline After RSI Breakdown – Is More Trouble Looming?
Zcash (ZEC) faces a steep drop of 32% over the week, with analysts predicting further declines as critical support levels crumble.
Zcash is facing pressure as it has seen a dramatic price drop, falling over 32% in just a week. Currently trading around $365, the cryptocurrency experienced a drop exceeding 20% in the last 24 hours. This decline follows the breaking of crucial support levels, prompting traders to assess if the downward trend will persist.
Recently, ZEC had shown strong performance, climbing from $40 to $700 in a few months. However, this current pullback indicates a potential shift in momentum towards the negative side.
Key Technical Levels Breached
ZEC has fallen below several key indicators within a short timeframe. Specifically, it broke below the 50-day simple moving average, the $480 horizontal support, and the 38.2% Fibonacci retracement, leading to further declines and entering a significant liquidity area around $400.
Crypto analyst Ardi expressed concerns about increasing weakness, highlighting a failed breakout in the RSI trend. He remarked, “Repeated warnings of structure being broken” emerged following the loss of early support. Additionally, he noted that numerous long positions were being liquidated in response to 5% downward movements, further exacerbating losses.
Zcash Price Chart
Source: Ardi/X
Furthermore, Zcash has continued to slide, nearing another liquidity zone around $370. Ardi also noted he closed half of his short position at this mark and indicated that should this level fail, the next target would be between $297 and $311, which coincides with the 61.8% Fibonacci level and a significant pool of past liquidity.
Trading activity surged, topping $1 billion over the last 24 hours, with ZEC fluctuating between $356 and $457 in that period, while showing a 7-day range from a high of $585 to a low around $358 (according to CoinGecko stats).
Momentum Indicators Show Further Weakness
Current technical indicators reinforce the prevailing downtrend. The MACD is trending lower, with its signal line confirming negative momentum. Increasing size of red histogram bars indicates strong selling pressure.
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At present, the Money Flow Index hovers around 35, indicating continued outflows, albeit close to levels where historical reversals have been noted.
ZEC/USD
Source: TradingView
Analyst Ali Martinez pointed out ZEC had returned to a recognized support area around $440.
“Bounce or breakdown?” he queried in a recent update.
This level has since crumbled, confirming lower lows and maintaining a downward structure.
Uncertainty Over Long-Term Direction
Market sentiment is mixed. Commentator Max Keiser stated,
“The $ZEC ‘pump ‘n dump’ is over. A trip back to $55 looks inevitable.”
His perspective reflects rising skepticism following the recent price drop. Additionally, it was recently reported that Grayscale intends to transform its Zcash Trust into an exchange-traded fund (ETF). If approved, this ETF could provide investors with easier access to ZEC without needing to hold the currency directly.
