Zcash (ZEC) Buying Power Weakens…Is the Bull Rally Over?

▲ Zcash (ZEC)/AI Generated Image ©

Zcash (ZEC) has reached a critical turning point around $450. Market attention is focused as retail investor buying sentiment slows, with the possibility of a rebound towards $500 and a potential correction down to $382 being raised simultaneously.

According to investment media FXStreet on July 7 (local time), Zcash traded below $450, continuing its weakness from the previous day. Retail investor interest, which had increased with the recent recovery in the cryptocurrency market, showed some cooling. Zcash futures open interest decreased by 3% over the past 24 hours to $770.33 million. The outlet explained that this suggests a decrease in leveraged positions and a weakening of investors' risk appetite.

Liquidation data also revealed market concerns about short-term direction. During the same period, long position liquidations amounted to $1.77 million, slightly exceeding short position liquidations of $1.51 million. However, the funding rate remained stable at 0.0096%, indicating that investors are still willing to maintain long positions by paying a premium. The outlet assessed that the funding rate's stability despite the decrease in open interest means that bullish expectations have not completely vanished but are gradually weakening.

Technically, Zcash is currently testing its 50-day Exponential Moving Average (EMA) at $453 but remains below the short-term downtrend line resistance near $465. Conversely, it is still well above its 200-day EMA at $382, indicating that the long-term trend is maintained, but the short-term trend remains neutral to somewhat restricted, the outlet diagnosed.

If Zcash breaks above $465 on a closing basis, it would confirm a breakout from the downtrend line, potentially opening the door for an ascent to $500 and further to $520, which is the 78.6% Fibonacci retracement level based on the upward move from $184 to $690. On the other hand, the Moving Average Convergence Divergence (MACD) showed diminishing positive histograms, indicating slowing upward momentum, and the Relative Strength Index (RSI) displayed a neutral, directionless trend around 50. In case of a decline, major support levels were identified at $382, where the uptrend line and 200-day EMA are located, and $437, the 50% Fibonacci retracement level.

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