Zcash is a popular cryptocurrency, but it will face a drop due to new EU legislation. It is a cryptocurrency that offers strong privacy features to its users. Moreover, its structure is very similar to Bitcoin, with just 21 million coins available for circulation.
ZEC is trading below 30% of its peak price. The main reason behind this is that many governments are taking strong actions against privacy coins. It allows anonymous crypto transactions that create an opportunity for good money laundering schemes.
As it is a decentralized system, no government can directly regulate those transactions. Last month the European Union announced stricter rules for such crypto transactions.
Now crypto firms will have to collect and share data of transactions. The legislation will also take strong actions against non-hosted wallets, and all of these become a huge barrier to accepting privacy coins like Zcash.
This privacy change may influence the ZEC price in the short term. It would be interesting to watch how other governments react against privacy cryptos.
Should you invest in this downtime and gain profit in the long term? Read our technical analysis and Zcash predictions to know more about its future potential.
At the time of writing, ZEC was trading around $155.34. On the daily chart, we can find a strong support level of around $132 and a resistance of around $160. The Zcash price is trading between this level, and it is difficult to assume which way it will go given the current changes due to government regulations.
However, the MACD line is bearish; RSI is below 50, also indicating bearish momentum. Moreover, candles are forming in the lower part of the Bollinger Bands. Overall, the ZEC coin is bearish in the short term, and it will not cross the $210 level soon.
On the weekly chart, we can find a sideways movement within a range of $98 and $250. Though the MACD line and RSI are strong and candlesticks are forming in the upper part of the Bollinger Bands, we think it is not the ideal time for long-term investment.
However, you can speculate that it may reach the $200 level within a few months. If you invest for the long term, you should keep an eye on the price movements.