Zcash (ZEC) has is gaining popularity, and not only as one of the top cryptocurrencies, but also as one of the most popular privacy coins. A look at its price action reveals that the token is in a tight range and might be due for a significant breakout.
ZEC’s macro trend reveals that it has been on a bearish downtrend since 26 March after peaking at $216. It bottomed out at $69.5 during the May crash and its price action since then reveals that it has been achieving higher lows. Those lows have created an ascending support line, which is now interacting with a descending resistance line.
Source: TradingView
Which direction is Zcash headed to?
ZEC’s current position means it is about to break above the resistance line or below the support line. Its Relative Strength Index (RSI) is still trading in the healthy range at 40.89 but the MFI is of more interest because it was already in the oversold/accumulation zone at press time. This means it there is a higher accumulation probability and such an outcome would likely build up bullish pressure.
Source: TradingView
The charts and indicators currently highlight uncertainty as the price approaches the tight range. This s reflected in reduced trading volumes, indicating that investors are unsure about the breakout direction. Zcash’s on-chain metrics also seem to point to a similar conclusion.
Zcash supply held by whales metric highlights significant accumulation since May. However, it has been hovering around 46.98% for the last few days, pointing towards low activity. The cryptocurrency’s market cap which is just below $1.30 billion also highlights a significant observation. In addition, ZEC’s on-chain volume dropped significantly in the first five days of June, reflecting the prevailing uncertainty.
Source: Santiment
Meanwhile, the Binance funding rate was still at 0.01% at press time. This means that there is still healthy sentiment within the derivatives market.
Conclusion
The uncertainty in Zcash’s price action is further exasperated by investor concerns over the impact of quantitative tightening. The latter resulted in a new wave of FUD which disrupted short-lived the end-of-May rally.
Despite this, ZEC seems to have grabbed the attention of Grayscale, one of the biggest institutional investors. This may be because ZEC has characteristics similar to those of BTC, such as a low circulating supply, and a deep focus on immutability.
Read More:Here’s why Zcash (ZEC) might be gearing up for a potentially explosive breakout
