coindesk.com
This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Prices for privacy-protecting digital currency Zcash ($ZEC) have moved past a key resistance or supply zone, hinting at bigger gains ahead.
Since February, $ZEC has traded sideways, with sellers dominating above $40. Meanwhile, dips near $25 have consistently found support, keeping the price within a narrow range.
On Sunday, buyers finally managed to chew through the long-held supply zone of $40-$43, hitting a high of $45.80 on crypto exchange HTX, the level last seen on Jan. 26, according to data source TradingView.
The so-called range breakout is like a spring uncoiling bullishly after building up demand during consolidation. This release of stored energy often results in a sharp, rapid move higher.
Technical analysis theory suggests adding the range width, or the spread between the upper and lower range boundaries, to the breakout point. In $ZEC's case, the measured move method points to a rally toward $60.
Price moves through long-held resistance levels, as in $ZEC's case, often draws bids from breakout traders. These entities seek to enter positions when the price of an asset moves beyond a defined support or resistance level, aiming to capitalize on a continued move higher or lower.
$ZEC's peer, monero (XMR), recently broke out of a bigger and more prolonged range play with a bullish golden cross, surging to highs above $300. Readers should note that chart patterns do not always work as intended.