Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the writer.
Since early April, Zcash has been in a steady downward trend. It peaked at $210 in late March, but the higher time frame market structure has been bearish since mid-April. At that point, the price fell below the $160 area, which was previously a support level. The price retested the same region as resistance later in April. It went on to set a series of lower chart highs, a trend that continued right up to the time of writing.
ZEC-12 Hour Chart
The downward trend has alternated with periods of rapid rallies. One of these occurred in mid-May when ZEC bounced from $69.5 to $116.6. Over the following weeks, the price bled slowly and slipped down the charts to trade at $52.7 at the time of writing.
Earlier this month, the $53-$57 area was tested as a demand zone and saw a jump towards the $70 level. However, the bears came out on top again, pushing the price back below $60.
The Relative Strength Index (RSI) confirmed that a downward trend has been underway for the past few weeks. It failed to cross the neutral 50 line and indicated strong downward momentum on the 12-hour chart.
ZEC- 4-hour chart
The aforementioned bounce from $69.5 to $116 was used to plot a series of Fibonacci retracement levels. ZEC has broken below each of them and has also retested $70 as resistance in the past two weeks. Over the past few trading days, both the $70 and $62.5 area have been found to be stiff resistance zones.
In addition, buyers could not drive up prices. When Bitcoin [BTC] slumped back below $20k, ZEC also lost quite a bit of value, dropping from $60 to $52.7.
$52.9 was then a support level and further south, $50 and $40.4 were plotted as the next Fibonacci expansion levels to watch out for. Since $50 was also a psychological support level, it could stop the bearish pressure for a few days.
The four hour indicators also painted a bearish picture for ZEC. The RSI was well below the neutral 50 line. The Awesome Oscillator (AO) has also fallen well below zero in recent days. Both developments highlighted the intense bearish momentum.
The Chaikin Money Flow (CMF) was also below -0.05, showing significant capital flow out of the market. However, the On-Balance Volume (OBV) remained at a supportive level from May.
If the OBV dipped below the support, and ZEC also below $50, it could be a sign that Zcash was likely to see further losses. $40.4 was marked as a Fibonacci extension level where a bounce could occur. $44 was also a place to watch out for. If Bitcoin were also to see a move below $18.8k, the decline could accelerate for Zcash.
This post Zcash retests USD 56 as resistance; these Fib levels can serve as a support
was published first on https://ambcrypto.com/zcash-retests-56-as-resistance-these-fib-levels-can-serve-as-support/