Summary

  • Zcash is currently priced at $1,333.50, reflecting a 7.29% drop for the day and sitting approximately 21% lower than its recent high of $1,698.00 after a notable rise of about 253% from a low of $480.72.
  • Grayscale's Zcash ETF saw a net outflow of $30.25 million on September 30, despite having accumulated $268 million in net inflows since its inception.
  • While the current market is challenging, technical indicators suggest ZEC may still have potential for recovery.

Zcash is facing significant challenges this Thursday, trading at $1,333.50, which is a 7.29% decrease from the previous day, with only a few hours remaining in the trading session.

This price represents a 21% decline from its peak of $1,698.00 reached in late September, illustrating the volatility following its impressive 253% surge from a low of $480.72.

Myriad: Where does XRP go next? Click to make your prediction.

The broader cryptocurrency market has not provided much support. Bitcoin surged to $85,600 on Wednesday following lower-than-expected PCE inflation data but subsequently lost those gains. The yield on the 10-year Treasury finished at 5.29%, and the likelihood of an interest rate hike by the Federal Reserve in October has decreased from 70% to below 50%, as reported by CME FedWatch.

Turning to the ETF situation, Grayscale introduced its Zcash ETF, ticker ZCSH, on August 25, which initially attracted $233 million in net inflows by mid-September.

However, the fund reported a $30.25 million net outflow yesterday, bringing the total net inflows to approximately $268 million. Additionally, a 3-for-1 share split was implemented on the same day.

Zcash ETF flows. Image: SoSoValue

The recent hack of Bitget, resulting in the theft of roughly $387 million from the exchange on September 24, also plays a role in shaping market sentiment. The initial estimate of the theft was $351.6 million, but it increased as more details emerged regarding transfers involving Zcash and Tron blockchains. The CEO of Bitget has indicated that the attack appears to be connected to North Korean hacking groups, although definitive attribution is still pending.

This incident poses a challenge for Zcash as it seeks to build a positive reputation in the financial markets.

On Wednesday, blockchain investigator ZachXBT reported that 2,746 ZEC, valued at around $3.9 million, was moved from addresses linked to the hack into Zcash's shielded pool, which obscures transaction details.

While the hack is unlikely to be the primary cause of today's price drop, the movement of $3.9 million is not a positive factor either.

Chart Analysis

Overall, Zcash remains in a bullish trend, but recent price fluctuations suggest a significant correction may be underway.

The Relative Strength Index (RSI), a measure of market momentum, currently stands at 50.2, indicating a neutral position—neither overbought nor oversold. This is a welcome sign following the previous overbought conditions observed during its price increase.

Zcash (ZEC) price data. Image: Tradingview

The Average Directional Index (ADX) is at 52.0, which indicates a strong trend, as values above 25 are considered indicative of a genuine trend. Although a reading of 52 is robust, it primarily reflects the previous rapid price increase and may remain high even if prices decline.

Exponential moving averages (EMAs) are currently showing that the 50-day EMA is still above the 200-day EMA, which suggests that the overall trend remains bullish on paper.

If the downward trend persists, these averages may converge, which often signals a potential trend change. However, such a rapid decline in Zcash's value is not anticipated in the near future.

Is the Rally Over or Just a Buying Opportunity?

A 21% decline following a 253% increase is not entirely unexpected. For instance, in June, ZEC plummeted from $635 to an intraday low of $309 after a significant vulnerability was revealed in its shielded pool, only to later rise above $1,600.

Thus, current price movements appear to indicate a correction rather than a collapse, at least for the time being. While trend indicators have not reversed, the momentum has slowed, and the ETF has just recorded a $30.25 million outflow.

A daily close below $1,233.00 could trigger further declines, while regaining a price of $1,410.72 would suggest a return to the upward trend.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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