ZCash holds above $400: Can ZEC beat the market as Bitcoin demand fades?

ZCash, the token that made privacy the talk across the crypto ecosystem, was rallying once again. It was up 8.4% in 24 hours.

The bullish momentum was due to a combination of technical and ecosystem developments.

While the privacy token appeared ready for a rally towards the end of the year, Bitcoin [BTC] and Ethereum [ETH] ETF flows were discouraging.

Demand for BTC and ETH was drying up over the past six weeks, the spot ETF flows showed. Meanwhile, ZCash saw expanded token utility, with holders getting access to yield opportunities.

The sustained defense of the $400 support zone was also a positive development over the past two weeks. AMBCrypto analyzed whether the conditions for swing traders to go long have been met.

ZCash: Bullish bias remains

The 3-day timeframe showed a bullish swing structure. The internal structure has not flipped bearishly yet, despite the retracement to the 61.8% level at $315 toward the end of November.

The CMF showed significant capital outflows, which was a worrisome sign for buyers. The MACD also reflected weakening momentum over the past month, even though ZEC has defended the $400 psychological level.

A move above $476, the recent swing high, would signal a bullish trend continuation. In this scenario, $600 and $750 would be the next targets.

The potential for a bearish shift

The weak buying pressure and waning bullish momentum showed swing traders that a breakdown below $400 is a real threat.

A drop below $371 would be the first real warning sign that ZEC prices are likely to go to $300 and lower.

Traders’ call to action – Time to buy ZEC

On the 4-hour timeframe, the structure was bullish once again. The $400 support has been defended.

Though the technicals were not fully bullish on this timeframe, the price action showed where long traders can look to bid.

The $450 zone was a short-term resistance, and ZEC could see another dip from this region. The imbalance at $416-$434 (white box) could be tested as a demand zone soon.

A drop below $404 would invalidate this setup. A sustained fall below $371 would signal swing traders to shift their bias bearishly.

Final Thoughts

• The ZCash rally was driven by expanded token utility and also technical developments, such as the defense of the $400 level.
• Swing traders could look to buy ZEC at the $416-$434 demand zone, with invalidation being the local swing low just above $400.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion