Zcash Price Plummets: A Closer Look at the Bearish Double Top Pattern
Zcash price has taken a drastic turn, plummeting 30% since reaching a 7-year high of $734.96 over the weekend. This significant drop has sparked concerns among investors, with many wondering if the cryptocurrency is on the verge of a major crash. According to data from crypto.news, the price of Zcash (ZEC) had risen over 850% from $76 on October 1 to $734.96 on November 8, its highest level in seven years. However, the tide seems to have turned, with ZEC currently trading at $512.
Driving Factors Behind the Price Rise
The recent surge in Zcash price can be attributed to several factors, including increasing investor demand for privacy-focused cryptocurrencies amid growing surveillance concerns and regulatory pressure on transparent blockchains like Bitcoin. Competitors such as Monero (XMR), Railgun (RAIL), and Dash (DASH) have also benefited from this demand, gaining 24%, 31%, and 49%, respectively. Moreover, the Zcash network has seen strengthening fundamentals, with 30% of the total ZEC supply, or around 4.83 million tokens, now stored in ring-fenced pools, an increase of almost 60% in the last month.
Bearish Sentiment Takes Hold
Despite the positive trends, market sentiment around Zcash appears to be bearish, with a significant decline in futures activity. Data from CoinGlass shows that open interest in ZEC futures has fallen by 28% in the last 24 hours, standing at around $846 million. This decline suggests that traders are closing their positions, indicating a lack of confidence in ZEC’s current price action. Furthermore, the long-to-short ratio has fallen below 1, indicating that a growing number of traders are betting on an impending price decline rather than gains.
Technical Analysis: Double Top Pattern
A closer look at the 4-hour chart reveals that Zcash price has confirmed a breakout from a double top pattern, a bearish indicator in technical analysis. The pattern’s neckline is at $503.42, while the two highs are at $749 and $683, respectively. 
ZEC price has confirmed a double top pattern on the 4-hour chart – November 11 | Source: crypto.news
Potential Price Targets
The momentum indicators are also showing bearish signs, suggesting a further downtrend. The MACD lines are pointing downwards, and the gap is widening as bears tighten their grip on the market. Meanwhile, the RSI is also falling and still has room to fall before reaching the oversold region. Based on this analysis, Zcash price could fall towards the psychological support level of $400, which coincides with the 50% Fibonacci retracement level on the chart. A decisive break below could trigger a decline towards $256.41, a target formed by subtracting the height of the double top pattern from the price market around the pattern’s neckline.
Conclusion
While the recent price rise of Zcash has been impressive, the current bearish sentiment and technical analysis suggest a potential crash. Investors should exercise caution and keep a close eye on the market trends. For more information, visit https://crypto.news/zcash-price-risks-crash-to-256-as-bearish-double-top-pattern-takes-shape/
Disclosure: This article does not constitute investment advice. The content and materials presented on this site are for educational purposes only.
