ZEC continues falling down in the cryptocurrency bearish market. Where will it find a support and where will go next?
In this post, I applied the following tools: all-round market view, market balance level, oscillators, trading volume.
All altcoins are in a very difficult situation now; but anonymous coins suffer the most. I continue watching their state, and today, I’d like to speak about Zcash.
It seems to be in the most complex situation among all altcoins, as ASIC miners are actively increasing hash rate, it is mostly about Bitmain ASICs.
Now, according to some data, this mining pool accounts for approximately 40% of the network total computing power, and the share is growing.
This situation strongly affects Zcash rate, for it’s about the risk of centralizing hash rate generation by one holder and a possible 51% attack.
Attacking the network and going short for Zcash, such manipulators can make money almost risk-free.
It is already known now, that over 50% of Zcash is mined by three email addresses, which is a direct threat of 51% attack.
If the information is confirmed, and all the three addresses belong to Bitmain, it will excessively press Zcash, triggering another wave of drops.
What levels will the coin be falling down to? Technical analysis will help us find out.
Let’s start with the monthly timeframe.
In the chart above, you see Zcash be close to the key levels in April: open level at about 187 USD and the monthly low at 173 USD.
The next support level is 142 USD, and then, the nearest support is as far as below 100 USD.
I also marked the check point of vertical volume indicator with the red line. As you see, the ticker is below this point, which means Zcash is weak.
In the weekly chart above, I added Keltner channel’s borders and centre.
You see, the ticker is below the bottom border, which creates additional resistance to bears and can push ZECUSD towards the bullish correction in the short term.
It is remarkable that the check point in the weekly volume indicator almost coincides with the monthly one. It proves this level to be important and result in a certain resistance to bulls in case of the rollback.
The primary target of the correction rise can be marked in the balance zone around Keltner channel’s centre - 275 USD.
Oscillators in the weekly timeframe do not suggest any optimism for the rebound. MACD is at the indicator window lower border, but shows red light to buying. RSI stochastic is close to the oversold zone, if it reverses without entering, it will be a good sign. But this is only in theory, oscillators don’t yet send any reversal signals.
In the daily chart, the situation looks even less promising.
As for all bullish signals, there is only bullish convergence of RSI stochastic, though, MACD doesn’t confirm this reversal, so we can’t expect the trend fundamental reversal.
Nevertheless, for the ZECUSDT pair, there is unclosed base level at 218 USD (remember QFL lessons), so we can count on a modest rollback towards the level.
There, the ticker will meet the daily moving average of Keltner channel, and a little higher, there is the monthly check point.
All these levels together make up the strong corridor; I suggest the next moving inside of it.
To study ZECUSDT trend more objectively, let’s find out what are Bitcoin prospects for now.
In the chart above, you see that the strong pump was followed by the price correction. The ticker can’t yet consolidate at level 6611 USD, despite the news the news about Bithumb hack, where about $30 million was stolen.
In the common depressive market, manipulators would get use of the news and press Bitcoin down the lows. But they seem to have different plans, instead of a crash, Bitcoin featured a slight drawdown, completely fitting into the borders of a sane correction.
I think this market reaction to be completely positive and identify the strong support at the current levels.
Summing all the above, the most likely scenario looks like this:
- ZECUSD will continue trading in the middle-term downtrend (according to technical analysis and fundamental factors, there are some reasons for it).
- There can be a bullish correction within next towards 218 USD.
- The strong resistance zone is between 218USD and 230 USD. The ticker is unlikely to move above the zone.
- From below, bulls are supported by the zone of 173-185 USD. The ticker will hardly go down below the zone.
- Fundamentally, ZEC is very weak. Its price id directly affected by the following factors:
- Zcash delisting from Japan’s exchanges;
- Bithumb hack;
- Risk of 51% attack.
Therefore, I think the most reasonable plan to trade ZECUSD to be like this:
- Buy at 218 USD;
- StopLoss at 245 USD;
- First target for profit-taking is at 185 USD; second – at about 173 USD.
- The last target must be below the bullish support level, at about 145 USD.
IMPORTANT! Follow your risk management rules and never open a position of more than 10% of your deposit. Calculate the entry point so, that the loss from the trade wouldn’t be over 1% of your deposit, or the amount you allocate as the limit on losses.
I wish you good luck and good profits!
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Price chart of ZECUSD in real time mode
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