Zcash Gets Small Bump on Ethereum News — Price Analysis

  • Short term trend: Potential uptrend if the dailies clear their EMAs
  • Long term trend: We could see a bottom forming here

The privacy coin Zcash (ZEC), once a star performer of the cryptoasset industry, has had a very tough year in terms of market performance. In fact, since before even 2019, ZEC has been in a pitiless downtrend trading against Bitcoin that has hardly taken a break from falling. But now, after the release of an Ethereum Improvement Proposal (EIP) a couple of days ago outlining the technicals of a potential Zcash-Ethereum integration, ZEC has received a small price bump.

Starting on a daily ZEC/BTC chart, we see that the news coincided with an abrupt surge, which put paid to a developing medium-term downtrend that was forming (especially on the histogram). This pushed ZEC through the support that it had just lost, and into contact with the 55 EMA for the first time since September; and before that, June.

Bump and trading rangeZEC chart by TradingView

If we see Zcash hold above the 21 EMA on the daily, we could then eventually see another attempt at the 55. Volume on the surge – Kraken exchange – was curiously small, however, suggesting a docile market that is easily moved by concentrated buying (or heavy buying on a USD pairing: See below).

Expanding to the daily USD(T) pairing on Binance, we get a pretty interesting picture of potentially growing strength. First and foremost, we see a rapidly building volume profile against USDT, starting in late September, as the price decline flattened out.

Pushing on resistanceZEC chart by TradingView

We also see a recent double bottom on the daily with bullish RSI divergence. This is promising – although we can also note the same pattern that occurred between September-October, with a price surge getting stopped at the 55 EMA. Now, the 21 EMA is confluent with the resistance formed during autumn lows.

Finally, on the 3-day chart, we get a sense of just how deep ZEC has dropped. $35 is the critical level on this chart, and if ZEC can get above it we might start to imagine a bottom put in.

Time will tellZEC chart by TradingView

The histogram on this chart is trending up in positive territory, but seems to be arching down. However, this candle just opened today and doesn’t close until the 9th, so it is too early to call it.

Zcash seems interesting, with the recent news associated with Ethereum (with Ethereum already in the headlines because of its hard fork this weekend) perhaps having caused a bit of energy in its market. We should keep an eye on this coin for further signs of reversal.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

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Bitcoin Dominance Bump Unlikely to Last — Market Analysis

The entire crypto market seems to be going risk-off and turning to a state of correction, after an excellent start to 2020 throughout January and February which saw significant gains. This is reflected in the brief pop in Bitcoin market dominance. But in the longer term, it’s a different story, and we must always bear in mind the intercourse the conflicting trends of different timeframes – and how they can still agree with each other.

Here, rather than focusing on any specific crypto, we’ll look at the market as a whole using some trusted indicators.

We first look at a small-to-medium-timeframe chart of Bitcoin plus Bitcoin’s market dominance arrayed against the “Others” market dominance, Others being a basket of all altcoins below the top 10. This panoply of charts gives us a broad insight into the whole market.

just some speedbumpsBTC chart by TradingView

During January and some of February, we can see clear risk-taking in the form of a rising altcoin market share. Bitcoin’s price was rising even as its dominance was falling: peak altcoin conditions, where so much buying is coming into the system that more entities are buying Bitcoin than selling Bitcoin for altcoins, even when there is a lot of that.

This pattern has reversed in the past few days, with Bitcoin’s price falling even as its dominance rose, with altcoins being sold back into Bitcoin. The market was overheated in the short term, and people are wisely hedging their profits.

But this trend is unlikely to last. Zooming out and looking at a chart of Ethereum/Bitcoin and both dominance charts again (with Ethereum being a general proxy for the altcoin market), we see a different story.

the bigger picture says the opposite thingETH chart by TradingView

There is a lot going on here. First we can note that Ethereum – again, bearing in mind its role as a general proxy for altcoins – has retaken a very important inflection line that it lost during 2019, the dotted line. It is likely, based on this line retaken last week, that Ethereum is starting a long term uptrend against Bitcoin – and that altcoins in general will do the same in the long term.

Moving to the Bitcoin dominance display in the middle panel, we see an agreement of the above thesis. Bitcoin’s dominance has fallen below its own critical level, namely the area near and above 70%, which BTC held for a while during 2019. This level had not been held since 2017, when Bitcoin put in its all-time-high – and it now looks to be trending steadily away from it again.

This trending away will again provide the space for altcoins to grow in market share, and we have already seen the beginning of this trend during 2020. Perhaps what we have seen was only ‘Round One’.

And moving below to the Others dominance, we see that this indicator has, yet again, taken an important level of 6% and is likely trending away from it. This is the same message in reverse: this level was first tickled during the first real altcoin mega-rally, in the beginning of 2017, and stayed above it for years. It was lost for a time in 2019, about the same time Bitcoin retook its level of 70%.

The larger trends are likely moving in the opposite direction than the shorter ones. Bitcoin's price, based on these indicators, is likely to continue rising even as its market share continues to falls. Altcoins, after years of being battered, are likely to continue gaining market share; and in that situation, the pie can only be getting larger overall.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com