Zcash price remains in a deep bear market after plunging by ~43% from its highest point this year. It was trading at $418 today after falling for three consecutive days, and technicals suggest that it has more downside to go.
Zcash Price Technical Analysis Suggests More Downside to Go
The daily timeframe chart shows that the ZEC price has crashed in the past few weeks, in line with our prediction, which cited the Wyckoff Theory.
The Wyckoff Theory suggests that assets move in four stages, including accumulation, markup, distribution, and markdown. It remained in an accumulation stage for years and then suddenly moved to the markup stage in October.
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The token has now moved to the accumulation and markdown phases, which are characterized by declines and panic selling.
Zcash token has now formed a rising wedge pattern, which is made up of two ascending and converging trendlines, which are now nearing their confluence zone. The wedge pattern is part of the formation of the bearish pennant pattern, which is made up of a vertical line and a triangle pattern.
The token is consolidating at the 25-day and 50-day Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) and the MACD indicators have all moved downwards. It also formed a double-top pattern with a neckline at $425, its lowest level in November.
Therefore, these technicals suggest that the Zcash price will have a strong bearish breakdown in the coming weeks, with the next key target being at $305, its lowest level this month and the 61.8% Fibonacci Retracement level.
A move below that support will point to more downside, potentially to more downside, with the next key target being at $250. The bullish outlook will become invalid if the token rises above the key resistance level at $47%, the 38.2% Fibonacci Retracement level.
ZEC Price Lacks a Clear Catalyst
Fundamentally, Zcash lacks a major catalyst that will drive it higher in the coming months, as most of them have been priced in. For example, there is hope that the Grayscale ZEC ETF will be approved in the coming months.
While this is a good catalyst, the recently launched altcoin ETFs like XRP, Solana, and Hedera Hashgraph have not boosted their performance despite the strong inflows.
Additionally, the rising demand for Zcash’s privacy network may not directly lead to a strong performance. Indeed, the ZEC price has plunged to a bear market even as the shielded supply has jumped to almost 5 million today.
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