The recent surge in Zcash has been remarkable, with the price skyrocketing over 700% in just three months. This steep increase has led to a temporary pause, raising questions about the sustainability of such momentum. Following a strong rally last week, the price is currently experiencing a pullback. Market analysts are keen to determine if this is a sign of waning momentum or merely a necessary reset.
Despite the indecision apparent in the short-term price movements, on-chain data and trading volume metrics indicate that buyers may still maintain control. Currently, Zcash is trading within a narrowing triangle pattern, suggesting that both buyers and sellers are weighing their options. Notably, the price continues to respect a rising trend line that has characterized the uptrend throughout this cycle. As long as this trend line remains intact, the overall outlook remains constructive.
Volume analysis provides critical insights into market dynamics. Utilizing Wyckoff-style volume color analysis, it is evident that while buying volume has cooled recently, blue bars—indicating buyer-led activity—are still predominant. Historical patterns reveal similar slowdowns in volume, such as the one that occurred after October 17, which preceded another significant rally of over 300% for Zcash. Therefore, even with recent cooling, the dominance of buyer volume suggests the potential for continued strength.
Furthermore, spot flow data underscores this narrative. On December 12, the market observed approximately $14.26 million in spot inflows, indicating a potential selling sentiment. However, this shifted dramatically to around $17.34 million in net outflows by December 13, which reflects a strong trend of coins being withdrawn from exchanges. Such outflows typically indicate accumulation by buyers during pullback phases rather than distribution during upward movements.
While there has been a mild pullback of about 2.5% in the past 24 hours, Zcash still boasts a 20% increase over the past week and maintains its impressive 700% rise over the preceding three months. The overarching trend remains intact, signifying a consolidation rather than a reversal.
For Zcash to ensure continuation of its bullish structure, it is imperative that the price breaks out of the triangle pattern. A critical level to monitor is $511, representing a potential 24% increase from current levels. A decisive daily close above this threshold would confirm a bullish breakout and indicate renewed buyer dominance.
If such a breakout materializes, the initial upside target would be near $549, followed by higher resistance levels around $733, which previously hindered rallies in this cycle. Further resistance zones are identified at $850 and $1,190, although reaching these would necessitate sustained market momentum alongside favorable broader conditions.
Conversely, the downside risk is also clearly defined. Should the price of Zcash fall below $430, the integrity of the triangle structure would be compromised. Strong support is located around $391, and a significant breakdown could lead to levels around $301 should broader risk-off sentiment pervade the market.
