Displaying significant momentum, Zcash [ZEC] has emerged as one of the top performers in the market, surging by 12% in just 24 hours to reach a trading price of $54.40. This surge has propelled the altcoin’s market capitalization to $886 million, edging closer to the pivotal $1 billion mark.
Over the past month, ZEC has observed a notable 48% increase, aligning with the positive movements witnessed in November by Bitcoin [BTC] and various other altcoins. However, as the market begins to show signs of a potential retracement, the question arises: will Zcash continue its upward trajectory or falter under the weight of bearish sentiment?
Analysis of ZEC’s Upward Trend
On the daily chart, Zcash is indicating another breakout from an ascending parallel channel. Although encountering robust resistance at the upper boundary of this channel, a surge in trading volumes, as depicted by the volume histogram bars, could help sustain the ongoing uptrend.
The Money Flow Index (MFI) currently stands at 73, underscoring a strong buying pressure driving ZEC’s upward movement. Despite the upward trend, the MFI has not yet entered the overbought territory, indicating potential room for further growth.
Given the bullish signals from the MFI and the breakout from the ascending channel, traders may consider holding or increasing their positions at this stage.
Further validation of the bullish sentiment can be found in the Moving Average Convergence Divergence (MACD) indicator, with the MACD line maintaining its position above the signal line. The positive MACD histogram bars further confirm the prevailing uptrend.
With these promising indicators in place, the next projected target price for Zcash is at the 1.618 Fibonacci level, which sits at $77. Notably, a substantial support level is also identified at $44. In the event that ZEC fails to breach the resistance at the upper boundary of the ascending channel, a price retreat towards this support level might be anticipated.
Record High Open Interest for Zcash
Zcash’s recent price advancements have sparked increased interest among derivative traders, evident from the escalating open interest. Over the past 24 hours, ZEC’s open interest has surged by 47% to reach $39 million at the time of reporting, marking the highest level since April 2022.
The rising open interest signals a growing number of traders initiating new positions in Zcash, a development that aligns positively with the price uptrend.
Analysis of Liquidation Heatmap Indicators
Examination of Zcash’s liquidation heatmap reveals a surge in liquidations concurrent with the price rise. The closure of leveraged short positions triggered heightened buying activity, consequently contributing to the uptrend.
Following the elimination of these short positions, the closest liquidation zone has shifted below the current price level, standing at $51. A potential drop to this zone could induce further downward movement due to forced selling resulting from long liquidations.
However, if additional buyers intervene before ZEC reaches this level and defend the support zone effectively, it could set the stage for a sustained uptrend.