Zcash Surges 340% in a Month: Bull Flag Pattern Points to $336 Target, Overbought Warnings Mount
This month, Zcash has been one of the best-performing cryptocurrencies on the market. The privacy-focused coin has risen almost 340% in
Quick overview
- Zcash has surged nearly 340% in value over the past month, nearing the $300 mark for the first time since December 2021.
- Despite a recent 13.5% drop, ZEC's technical indicators suggest potential for further gains if it maintains support above $245.
- The weekly RSI indicates extreme overbought conditions, raising concerns about a possible correction in the near future.
- Analysts believe that if Zcash can hold above critical support levels, it may target prices as high as $336 or even $375.
This month, Zcash has been one of the best-performing cryptocurrencies on the market. The privacy-focused coin has risen almost 340% in value over the past 30 days. This amazing rise has brought ZEC close to the $300 psychological barrier, a price that hasn’t been seen since December 2021. This is despite the fact that the rest of the crypto market has been quite unstable, with a $20 billion liquidation event over the weekend. The coin has dropped about 13.5% in the last 24 hours, though, and is presently trading at about $236, down from its monthly high of $298 as people sell up their holdings.
The rise in Zcash’s value shows that more people are interested in cryptocurrencies that protect privacy, especially as governments around the world start to pay more attention to them. People in the industry, like Naval Ravikant, have publicly backed Zcash as “insurance against Bitcoin,” which has helped bring attention to the currency. Also, shielded Zcash holdings, tokens that use zero-knowledge proof technology to stay entirely untraceable, have grown to make up 27% of the total supply. There are currently more than 4.42 million ZEC in privacy pools, which are valued about $1.12 billion on the market.
ZEC/USD Technical Analysis: Bull Flag Breakout Could Push ZEC to $336
From a technical point of view, Zcash shows textbook continuation patterns that signal the rally may have more room to run. The coin is forming a classic bull flag pattern on the four-hour chart, which is a bullish continuation setup that usually comes before another big rise. The most recent price movement has created a tombstone Doji near the top resistance of the flag. This suggests that the price will stay the same for a brief time before moving again.
Technical analysts say that if buyers can hold critical support levels and push the price above the flag’s upper trendline, the price might rise by 25% to $336 in October. This goal is a breakout that fits with healthy momentum indicators. ZEC is still trading above its 20-period and 50-period exponential moving averages, which means that broader bullish momentum is still going strong despite recent turbulence.
The liquidation landscape is also very important to understand. CoinGlass data shows that about $5.36 million in long liquidations are grouped around the $244 level. This makes this area a key support zone. It is important for the price to stay above $245 in order for the upward momentum to continue. If it goes below this level, it could set a goal toward the 50-period EMA at about $210.75.
Extreme Overbought Conditions Present Significant Correction Risk
But there are caution indicators that come with the bullish technical situation. The weekly Relative Strength Index (RSI) for Zcash has shot up to over 92, which is the highest level ever seen on the weekly chart. This extremely overbought signal makes me worry that there might be a pullback. Notably, the last top RSI of 78 in April 2021 was followed by a drop of about 70% over the next few months. This suggests that mean reversion could happen after the current levels.
If the price drops sharply and causes overleveraged long positions to be liquidated, a breakdown below the $245 support level might lead to a chain reaction of forced selling. In this case, ZEC might move toward the $210 support level, which would be a big drop from where it is trading now.
Zcash Price Prediction: $245 Support Level Becomes Critical Decision Point
ZEC has to find strong support near the 0.786 Fibonacci retracement level at $245 in order for the bullish case to stay strong. If this level stays the same, the way to $307 and maybe even $336 looks like it could work out. If it breaks above $300, it might possibly be able to test Zcash’s 2021 high of around $375.
On the other hand, if $245 isn’t defended, it would signify the start of a corrective phase, with $210.75 being the next significant support zone. Analyst Altcoin Sherpa says that drops to $200 or even $230 might be good purchasing opportunities. This shows that they are confident in the long-term bullish fundamentals, even though there is a possibility of a correction in the short term.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save