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Zcash [$ZEC] deployed the Ironwood [NU6.3] upgrade to testnet on 2nd July. The privacy token rallied by 37% over the following two weeks, breaching the $500-supply zone.
This upward momentum has since evaporated though. Over the past week, $ZEC has lost 13.6% of its value, with the altcoin down by 3.1% in the past 24 hours alone. Thanks to the same, $ZEC is now back below the $500-mark.
Since Sunday, 19th July, $ZEC has posted red candles on the daily timeframe. Will this streak continue over this weekend too?
The long-term $ZEC trend is bullish, but momentum faces hiccups
The swing structure, based on the rally from $20.7 to $750, was bullish. Within this structure, $ZEC has faced much tumult so far. The latest development, the downturn below $500, was not a catastrophic outcome across the higher timeframes though.
Yes, the RSI slipped below neutral 50. The Directional Movement Index’s -DI (red) was climbing above 20, an early signal of a bearish trend in progress. The A/D indicator has shown weak demand in July too.
The $500-area has been contested since May. It has been flipped to a supply zone once more, weakening the bullish case in the short-term. However, in the long-term, this setback might not be too grievous for the buyers.
Traders’ call to action – Sell
In the short-term, $ZEC’s inability to flip $560 to support and break $644 may be a sign of weakness.
At press time, the H4 structure was bearish and Zcash has faced rejection from the 78.6% Fibonacci retracement level at $560. Further downside could be likely.
The RSI was hovering around the oversold territory, a sign that the price might bounce towards the 20-period moving average at $501 before sliding lower.
Finally, the liquidation heatmap showed how the short liquidations built up below $600 were targeted and taken out during the mid-July rally. The reversal since then is likely to target the $360-area, the next magnetic zone.
The 4-hour timeframe presented a price target of $250 swing low made after the Orchard bug was discovered.
Final Summary
- Zcash’s rally beyond $500 lasted less than a week before reversing.
- Liquidation heatmap and price action charts presented the $360 and $250-levels as the next bearish targets for $ZEC.