Zcash price has gone parabolic recently, transforming the often sleepy coin into the best performer in the past few days. It jumped to a high of $180 on Saturday, up by nearly 400% from its lowest level in September.
Why the Zcash Price Has Soared
The ongoing ZEC price rally has brought its market capitalization to over $270 billion. Its volume has also jumped in the past few days, while shorts worth millions of dollars were liquidated.
The ongoing surge stemmed from an announcement by Grayscale that it would launch a trust dedicated to the coin. This launch raises the possibility that the company will ultimately file for an ETF dedicated to Zcash, a move that is likely to lead to increased demand.
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Zcash is one of the largest privacy-focused cryptocurrencies in the industry, competing with Monero and Dash. It facilitates privacy by offering users a choice between transparent and shielded transactions.
The transparent transaction is similar to that of other cryptocurrencies, such as Bitcoin and Ethereum, in that they are recorded on a public ledger. The shielded transactions, on the other hand, encrypt key information, such as the sender, receiver, and amount, using zero-knowledge proofs.
Another notable aspect about ZCash is that it was built on Bitcoin’s codebase. Indeed, it has a supply limit of 21 million and uses the proof-of-work mechanism.
ZEC Price Technical Analysis
The daily timeframe chart shows that the Zcash price bottomed at $34.63 in August and then rebounded to a high of $180 this week. Most of these gains accelerated after the coin jumped and crossed the important resistance level at $55.83, its highest point in May.
The Relative Strength Index (RSI) and the Stochastic have all pointed upwards. However, the coin has now moved into the overbought level.
ZCash is also in the markup phase of the Wyckoff Theory. Therefore, the most likely scenario is where it reverses and resumes the downtrend, potentially to the psychological point at $100.
This retreat will happen because the market is overbought, and investors will opt to book profits. It will also drop as investors sell in response to the Grayscale news.
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