Summary
- Zcash surged by as much as 20% to reach an intraday peak of $1,029 on Friday, marking its highest price in nearly ten years, leading to the closure of approximately $34.5 million in short positions after breaking the $1,000 threshold.
- This price movement followed a rally on Thursday, spurred by comments from Federal Reserve Governor Christopher Waller, who indicated a preference for maintaining current interest rates, which reduced the likelihood of a September rate hike from 63.2% to 50.4% and triggered over $415 million in short liquidations across the cryptocurrency market.
- The release of the August jobs report on Friday revealed that the U.S. added 162,000 jobs, far exceeding the anticipated 56,000, which caused Bitcoin to drop below $80,000 due to renewed hike expectations, although Zcash managed to retain most of its gains.
On Friday, Zcash broke through the $1,000 mark, achieving its best price in almost a decade and continuing a rally that began near $500 just a month prior. The cryptocurrency reached an intraday high of $1,029 on Binance before settling around $984, representing a roughly 20% increase in a 24-hour period and achieving a new all-time high.
The market capitalization of Zcash approached $17 billion, allowing it to surpass Dogecoin to become one of the top ten cryptocurrencies, according to CoinMarketCap.
Myriad: What will happen next with XRP price? Make your prediction here.The breakout above $1,000 surprised many short sellers, leading to the forced closure of about $34.5 million in short positions, as reported by CoinGlass, which contributed to a total of approximately $36.6 million in ZEC liquidations. Each trader forced to buy back their short position increases real demand, which has been a factor in the ongoing rally.
A Long-Awaited Short Squeeze
Zcash is classified as a privacy coin, one of several in the cryptocurrency space but arguably the most recognized alongside Monero (XMR). Launched in 2016 by cryptographer Zooko Wilcox and a group of researchers, Zcash offers privacy features unlike Bitcoin and Ethereum, where transactions are visible on a public ledger by default. Zcash employs zero-knowledge cryptography to obscure transaction details while still confirming their validity.
The cryptocurrency is currently experiencing one of the most remarkable growth trajectories in the market, especially among older digital assets. Over the past 30 days, Zcash has appreciated by approximately 94% and has skyrocketed by more than 2,300% over the past year, outperforming all other major cryptocurrencies, even following an eight-year price high in August. Grayscale's Zcash ETF launched on NYSE Arca under the ticker ZCSH on August 25, offering investors a way to invest in ZEC without needing a digital wallet.
Despite the ongoing trend, some traders remain cautious, as indicated by the daily chart. The Relative Strength Index (RSI) has reached 78.6, surpassing the 70 level typically interpreted as overbought. Meanwhile, the 50-day moving average is above the 200-day moving average, signaling a bullish trend. This suggests that short-term demand is currently outpacing long-term demand, which is a positive sign for potential new investors.
Zcash (ZEC) price data. Image: TradingviewThe Average Directional Index (ADX), which measures trend strength regardless of direction, currently stands at 48, significantly above the 25 threshold that indicates a significant trend is in place. With positive momentum exceeding negative momentum, it suggests that the trend remains strong enough to continue pushing through overbought conditions, at least for the time being.
As Zcash enters a price discovery phase, potential support levels could be around $892.94 and $808.63 if the rally begins to cool.
While Zcash is outpacing Bitcoin, both cryptocurrencies began the week responding to the same catalyst. Bitcoin regained the $80,000 mark on Thursday following comments from Federal Reserve Governor Christopher Waller, which reduced September hike odds and triggered over $415 million in liquidations across the broader market.
However, this trend reversed on Friday morning after the Bureau of Labor Statistics released data showing the U.S. economy added 162,000 jobs in August, significantly higher than the expected 56,000, with unemployment remaining at 4.1%. This caused Bitcoin to dip back below $80,000 as traders adjusted their expectations for a potential rate hike at the Federal Reserve's upcoming meeting on September 15-16, while the August CPI report next Friday will be closely monitored.
Disclaimer
The opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.