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Zcash (ZEC) Faces Potential Price Setback After Impressive Rally
Zcash (ZEC) has surged 90% in the last month but may face a correction. With trading volume down 45% and an RSI of 77.02, signs point to a possible price drop to $37.18. A rebound is possible if buying pressure increases.
Zcash (ZEC), the privacy-focused cryptocurrency, has surged by an impressive 90% over the past 30 days. Currently trading at $41.36, ZEC has emerged as one of the top-performing altcoins. However, there are signs that the coin might face a price correction.
On July 12, ZEC was priced around $23.81, meaning it has nearly doubled in value since then. During the same period, its market capitalization grew significantly from $360.68 million to $625.72 million. This rise in market cap reflects the dramatic price increase, given that only 15.11 million of the 21 million total ZEC supply are currently in circulation.
Despite the strong performance, ZEC's trading volume has declined. On August 10, volume was over $145 million, but it has since dropped by nearly 45% to $79.66 million. Typically, a rising price accompanied by increasing volume is a bullish signal, while a decrease in volume during a price rise suggests weakening bullish momentum and potential for a price retracement.
Technical Indicators Point to Possible Decline
The Relative Strength Index (RSI) for ZEC is currently at 77.02, indicating that the coin may be overbought. The RSI is a technical indicator used to gauge the speed and change of price movements, with values above 70 suggesting overbought conditions and potential for a pullback.
Based on Fibonacci retracement levels, ZEC’s price could potentially drop to $37.18 in the short term if the current trend continues. However, a rebound from this level is possible, especially if buying pressure increases. Should this occur, ZEC could surpass its recent peak of $42.97 and possibly test the $44 range.
Bottom Line: While Zcash has had a stellar run, technical indicators and declining trading volume suggest that a short-term price correction might be imminent.
