Zcash (ZEC) has been on a remarkable rally, with its price surging 10.29% in the last 24 hours to reach over $425. This significant increase represents a 41.50% rise from its lows of around $300 just a week ago. The cryptocurrency’s strong performance has led some analysts to predict a further rally to or above $500 in the coming days.
Key Factors Driving ZEC’s Rally
Several key factors are driving ZEC’s rally, including a potential double bottom structure and whale accumulation. Trader Goomba identified Zcash’s recent swing lows as a possible double bottom structure, which appeared to be developing in the $300-$310 area. The subsequent move above interim resistance near $380 marked a breakout from the neck line, according to the trader.
ZEC/USDT four-hour price chart. Source: TradingView
Double Bottom Structure and Measured Target
Such formations have a measured target that places the next notable target in the $480-$500 range, which coincides with a previous supply zone. Goomba noted that the structure remained valid as long as ZEC remained above the reclaimed neckline level. This potential target has significant implications for investors, as it suggests that ZEC could continue its rally towards the $500 level.
ZEC/USDT daily price chart. Source: TradingView/Goomba
Whale Accumulation and Retail Investor Behavior
According to trader Ardi, ZEC’s retail investors ($0-$1,000) and mid-level traders ($1,000-$100,000) reduced their net exposure by more than $30 million during the recent rally. In contrast, larger whale accounts ($100,000 to $10 million) increased their exposure by over $100 million over the same period, suggesting a divergence in behavior.
ZEC/USDT hourly chart. Source: TradingView/Ardi
Bear Flag Risk and Overbought RSI
Despite the bullish signals, Zcash’s recent rally occurred within what appears to be a classic bear flag pattern, a weakening relief channel that formed after a sharp sell-off in November. Historically, these rising channels developed downwards, and ZEC’s failure to hold above the flag’s upper trendline suggested that sellers were already regaining control on Tuesday.
ZEC/USDT four-hour price chart. Source: TradingView
At the same time, ZEC’s Relative Strength Index (RSI) had risen above the overbought threshold of 70, an area where bullish momentum often falters. Taken together, these signals suggest that a break from the flag could have opened the door for a move towards the $260-$280 zone, which is about 35% below current price levels.
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making their decision. For more information on Zcash and its potential price movements, visit Cointelegraph.
