ZCash (ZEC) Technical Analysis: Battling to Overcome Critical 20 SMA Resistance
Nothing in this article is to be construed as investment advice. Neither the author nor the publication assumes any responsibility or liability for any investments, profits or losses you may incur as a result of this information.
Privacy coins appear to be having their day today, with Zcash and Monero pulling away from the rest of the market with 6.76% and 4.42% gains respectively against US dollar trading pair.
After a shaky start to the month where ZEC suddenly flash crashed to $15.60 (-69.00%) on March 4, the asset has gone on to recover well and break back over a key psychological level at $60. Trading volume has seen a marked increase over the last 48hrs, spiking from $180 Million to its current level at $245 Million as bullish momentum continues to build.
On March 19 Bitmain announced the release of their new Equihash Antminer Z11 - an ASIC mining rig that the company claims is 3x more powerful than the earlier Z9 model released only 9 months ago. This new equipment will directly compete with the ZCash GPU mining community for block rewards, and give Z11 owners a huge 135K Sol/s hashing advantage.
In other news, the Zcash company decided to rename itself the ‘Electric Coin Company’ last month in a bid to realign with its legally registered name, “Zerocoin Electric Coin Company LLC”. The move failed to ignite any significant bullish support from its unimpressed community, and many took to Twitter to post criticisms of the new name.
On the 1W ZEC/USD we can see that the price action has been tracking inside a descending channel since January 1, 2018, between a strong support and an even stronger 20 SMA resistance.
On December 10 the price action returned to the downtrending base support (dotted line) and was able to break sideways along a new bottom level support at $48.40, as bear traders finally began to thin out.
Since then bullish trading sentiment appears to have returned, and ZEC has been able to make increasingly higher lows throughout Q1 - ignoring the flash crash on March 4.
So far the 20 SMA has succeeded in holding down the price action on 5 separate occasions (red arrows) over the 1W chart, including this week’s breakout attempt at $63.34. This, coupled with a strong sideways resistance area (red shaded area) around the $68 level, will be a major test for ZEC buyers if the asset is to continue bullish into Q2.
Looking at a number of 1D indicators it seems that bullish momentum is still strong behind the asset, however if Bitcoin begins to slide away from $4,000 then it could have a knock-on effect on ZEC’s uptrend.
- The RSI is about to break over into the overbought region at 71%, so we could expect a brief correction before the bull run continues.
- The 12MA on the MACD indicator is climbing away from the 26MA as short-term bullish momentum increases.
- On the Chaikin Money Flow (CMF) the indicator line is still spiking high as buying pressure mounts in the orderbook.
- The Aroon Up line is also holding high above the Aroon Down line.
ZCash (ZEC) Price Targets
All ROIs are calculated from the asset’s current value at $61.21.
PT1: $64.05 (4.64%)
PT2: $66.41 (8.50%)
PT3: $69.70 (13.87%)