Key takeaways:
Zcash (ZEC) has surged over 520% in the past month, even overcoming the wider crypto sell-off that erased $20 billion in leveraged positions over the weekend.
This surge brought the privacy coin close to the $300 mark, a price not seen since December 2021, making ZEC one of the market’s top performers.
Will ZEC’s price continue to rise from its current levels, or is a cooling-off period necessary?
ZEC technicals indicate another 25% rally
Zcash’s dramatic uptrend appears to be consolidating within a typical bull flag pattern, a continuation setup that generally precedes another upward move.
The latest candle on the four-hour chart has formed a gravestone Doji near the upper trendline resistance, indicating a potential short-term pullback toward the flag’s lower boundary around $237.
ZEC could confirm a bullish breakout if buyers drive the price above the flag’s upper trendline. This movement would establish a technical price target for October near $336, roughly 25% higher than current levels.
This setup further aligns with healthy consolidation above the 20-period (green) and 50-period (red) exponential moving averages (EMA), suggesting that broader bullish momentum remains intact despite signs of short-term overheating.
Bearish scenario includes $210 ZEC price
If ZEC’s price falls between the supports, specifically the flag’s lower trendline and the 20-period EMA, the likelihood of a decline toward the 50-period EMA at approximately $210.75 in October increases.
A decline in ZEC below the $244 mark risks triggering a wave of forced long liquidations, deepening the pullback before any potential recovery.
In simple terms, that’s where numerous traders’ stop-losses, or liquidation points, are poised to be activated, which may push ZEC prices toward the earlier mentioned $210.75 target.
ZEC reaches record “overbought” levels
The bearish outlook also relies on Zcash reaching its most overbought levels on the weekly chart, potentially leading to a short-term pullback in the coming weeks.
As of Monday, ZEC’s weekly relative strength index (RSI) was above 92, its highest recorded level.
Previously, the peak RSI was 78 in April 2021, and ZEC’s price subsequently dropped by nearly 70% over the following months.
A similar cooling-off phase may follow, especially if the price fails to secure firm support near the 0.786 Fib retracement level at $245.
Conversely, a bounce from $245 support could propel the price toward $307 or higher, retesting ZEC’s 2021 high around $375.
Related: EU to ban anonymous crypto accounts and privacy coins by 2027
Analyst Altcoin Sherpa mentioned that any declines toward $200 may be a “buy,” indicating that these lower levels could represent the bottom in the coming days.
“I’ll be interested around $230 or lower if it comes,” he added.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
