Zcash price has lost momentum and crashed over the past few months, falling from a high of $746 in November last year to the current $265. This crash has brought its market capitalization from over $10 billion to $4.3 billion.
Why the Zcash Price Has Crashed
Zcash, a top player in the privacy industry, has crashed over the past few months as investors continue to book profits after the recent surge. This rally pushed it from a low of $44 to a record high of $746. It is common for financial assets to pull back after experiencing a parabolic move.
The ZEC price has also retreated amid the ongoing crypto market crash, which has affected Bitcoin and most altcoins. The market capitalization of all coins has slumped from over $4.3 trillion last year to $2.3 trillion today. This industry is highly correlated, with Bitcoin’s retreat leading to declines across other altcoins.
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The Zcash price has also slumped due to technical factors. As BanklessTimes explained, the surge occurred as the coin moved from accumulation under the Wyckoff Theory to a markup. It had been in this accumulation for over three years.
The coin has now moved into the distribution and markup phase, as smart money investors have already sold. These two phases are usually characterized by intense panic selling among retail investors. This explains why the futures open interest has dropped to $400 million from last year’s high of over $1.38 billion.
At the same time, competition in the privacy industry is expected to keep rising in the near term. For example, Cardano is working on Midnight, a sidechain focused on privacy, leveraging the zero-knowledge (ZK) technology.
Also, Ethereum plans to implement a major upgrade later this year that will introduce stealth addresses. This is important as ETH is one of the most commonly used tokens in the crypto industry.
ZEC Price Prediction: Technical Analysis
The daily chart shows that ZEC’s price has slumped over the past few months. It has crashed from a high of $746 to the current $265. It remains below the key support level at $302, its lowest level in December last year.
The Zcash price has remained below the 50-day and 100-day Exponential Moving Averages (EMAs). Also, the Relative Strength Index (RSI) has moved from the neutral point at 50 to the current 35.
Therefore, the most likely scenario is that the coin continues to fall, potentially to the key support level at $185, its lowest level this month.
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