Zcash (ZEC) Rejected from Resistance, Likely Confirming Bearish Trend

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In Brief
  • ZEC is trading between long-term support and resistance at $52.50 and $76 respectively.

  • Weekly and daily technical indicators are bearish.

  • ZEC is likely in the C wave of an A-B-C correction.

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Zcash (ZEC) had briefly broken out from a long-term resistance level but failed to sustain the rally and has fallen back since.



The price outlook seems bearish and an eventual breakdown from the current support area is expected.

ZEC Failed Long-Term Breakout

ZEC has been creating higher lows since Aug 6 when it reached a local high of $102.74. The decrease has been swift, especially at the beginning of September when ZEC created a bearish engulfing candlestick and dropped below the $75 area.

Dropping below this level is very significant since it implies that the previous breakout (shown with the red circle in the image below) was only a deviation above the range high. This was confirmed by a rejection from the same level on Oct 12.

At the time of press, ZEC was trading slightly above $55. If it breaks down below this level, it may trigger a sharp drop.



Technical indicators in the weekly time-frame are bearish since the RSI has decreased below 50 and the Stochastic oscillator has made a bearish cross. Therefore, an eventual breakdown is expected.

ZEC Chart By TradingView

Decisive Fib Rejection

The daily chart supports the possibility of another dip. The aforementioned Oct 12 rejection also coincided with a rejection from the 0.5 Fib level of the entire downward move.

 

Similarly, technical indicators are bearish. The MACD has crossed into negative territory, the RSI has been rejected by the 50-line and is decreasing, while the Stochastic RSI has finally made a bearish cross.

The rate of decrease would be expected to accelerate if the September lows near $50 are broken.

ZEC Chart By TradingView

Wave Count

Cryptocurrency trader @TheEWguy stated that the ZEC price is correcting and will likely drop near $40. As seen in the sections above, this wave count aligns with the price action and technical readings.

Source: Twitter

The wave count indicates that the decrease from the aforementioned Aug 14 highs was an impulsive move (highlighted in red below).

What followed was a corrective structure (highlighted in black), in which waves A:C had a 1:1 ratio. If correct, ZEC has likely begun another bearish impulse (highlighted in red).

If this is a longer-term A-B-C corrective structure (white) and both impulses (waves A:C) have a 1:1 ratio, then the price could reach a low of $23, coinciding with the March lows. At the time, this is not certain to occur, but more information will be available as the impulse continues to develop.

ZEC Chart By TradingView

To conclude, the ZEC price is expected to eventually break down from the current support area and continue its descent at an accelerated rate.

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Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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