Zcash is one of the cryptocurrencies that offers secure transactions using a public blockchain. The key point which makes it different from Bitcoin is that it allows the users to do confidential transactions using technology architecture that focuses more on anonymity, making transactions more privacy-centered. The core concept is to use Bitcoin’s underlying technology, decentralize it and make the transactions untraceable with its custom-built architecture. Whilst this sounds cool on the surface and promising, the cryptocurrency is facing some difficulties with its market participation.
Zcash Price Analysis
Zcash is following a strange price pattern after a significant downfall from $350 in May of 2021. The first half of 2021 shows ZEC trending upwards by following the 50-day moving average gently. But in the middle of May, the price suddenly drops, and it now continues a sideway trending pattern. It is observed that the price is trading in the range of $75 to $175, with the support level at the former price range. The current price of Zcash is sitting at $106.46 close, which is a massive downfall from its 52-week highs.
The trendline is converging at the price point near the support level. Price predictions for this range are that the support level will be touched, and the price will go well above a 50-day moving average. Due to the loss in trading volume and less accumulation over the past few months, it is better to use swing trading strategies to capture market profits by moving in a sideways market.
Most of the accumulation happened during the beginning of January 2021, where we can see an increase in the volume of Zcash as indicated by the Accumulation/Distribution indicator. There was a little dump in volume in April, followed by a huge downward spike in the ZEC price in the latter half of May. The price has broken and struggles to create any upward momentum. Volume has failed to pick up in the second half of the year. If this continues, it could be a disaster for Zcash as per Zcash price prediction. Investors must be careful about investing in ZEC coins.
Bollinger bands analysis shows that the Zcash price volatility was very low at the beginning of January. As the price picked up its pace, we can see a clear rise in volatility because of the strong market participation, as indicated by high volume spikes in mid-February. The same is confirmed by the Accumulation/Distribution Indicator.
The volatility in ZEC price increases in May and Bollinger Bands spread wide. This volatility slowly decreased over time, becoming the lowest in July because of the loss of market participation and huge volume spikes. Using the Bollinger Band swing trading strategy, it is possible to enter the market.
Profit-taking should be done as soon as the volatility increases again, increasing the Zcash price or cutting the losses using a stop loss. It should be noted that cryptocurrencies are high-risk, big payoff play. During times of uncertainty in cryptocurrencies, investors can trade smartly by allocating a small percentage of their portfolio depending on their risk appetite.