Zcash price has traded flat over the past 24 hours, despite around $2 billion of crypto positions being liquidated during the decline. This made ZEC one of the few coins to hold up during the overall market decline.
Although still up over 27% week over week, the next breakout is still not guaranteed unless the price clears one key hurdle.
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Momentum signals reveal downside win, but risks haven’t disappeared
On the 12-hour chart, Zcash continues to move within an ascending channel. The upper trend line has only two touchpoints, so it can easily break if momentum improves. However, the breakout theory encountered some problems during the decline, which was mainly caused by three key indicators.
On-balance volume (OBV) indicates whether real demand is supporting prices. From November 19th to 20th, prices hit higher lows, but OBV hit lower lows.
Such a bearish divergence weakens the trend. OBV touched channel support and rallied on November 20th, avoiding further breakdown. However, ZEC needs OBV to exceed 10.09 million to confirm strong demand.
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Chaikin Money Flow (CMF), which tracks large inflows from wallets, has been declining since November 7, which explains why ZEC has failed to break out of the top of the ascending channel.
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The CMF briefly exceeded zero on November 14th, triggering a mid-term bull market. The indicator has returned above the zero line. Still, a move above 0.02 would be more evidence that capital flows have recovered.
However, the Relative Strength Index (RSI), a momentum indicator, has added a major risk.
From November 10th to 16th, Zcash price made new highs, while RSI made lower highs. This bearish divergence showed that Zcash price was increasing while losing momentum.
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This is also a time when the Bears briefly took the lead, coinciding with OBV and CMF’s weaknesses. Now, the RSI is once again moving with the price, indicating that momentum support is returning. That’s why Zcash “just barely” broke the selloff without turning into a deeper reversal.
Zcash price level shows that war is still a long way off
Zcash’s price level will determine whether the bulls are able to lead an outbreak war.
The first major barrier is the initial breakout target at $766. This is a trend-based expansion zone where ZEC stalled previously. A clearing of $766 will see the first real change in momentum.
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If ZEC breaks above $766, the next important target will be $978. This level also represents a possible breakout of the ascending channel itself. A solid break above $978 would pave the way for a four-digit price.
On the downside, the first support is at $635. Losing it will result in a loss of $555. A decline below $555 will force ZEC out of the ascending channel and bring the trend back to neutral. This is where the bull bear power indicator becomes important.
The Bull Bear Power Indicator compares prices to underlying trend values to show who is in control of short-term strength. After the RSI divergence (November 10th to 16th), the bears briefly took control and matched the decline in the intermediate channel.
However, the indicator has now returned to the positive zone, meaning that the bulls are once again in control. Currently, the bulls are in the lead in the power indicators of bulls and bulls, so if the price breaks above $766, the outbreak war will intensify. If Zcash price breaks above $766 while the bull bear power remains positive, Zcash will have a real chance to attack $978, an important breakout level that will determine the next leg of the trend.
