Zcash (ZEC) Falls 3.80%... Tests $1,232 Support Amid ETF Outflows

Zcash (ZEC) fell 3.80% in a single day, dropping to the $1,234 level. Amid a widespread risk-off sentiment following the Binance hacking incident, capital outflows from the US spot Zcash Exchange Traded Fund (ETF) intensified selling pressure. The market warns of further declines if the $1,232 support level breaks.

According to the cryptocurrency market data aggregator CoinMarketCap on November 1st (KST), Zcash, ranked 10th by market capitalization, traded at $1,234.25, down 3.80% over the past 24 hours. Compared to Bitcoin's slight rise during the same period, Zcash's underperformance was notable. The overall cryptocurrency market's Fear & Greed Index remained in the 'Fear' zone at 35, and the total 24-hour trading volume sharply decreased by 56.39%.

ETF capital outflow is cited as the most direct cause of the decline. The Binance hacking incident, reportedly worth $6.3 billion, stimulated a general risk-off sentiment in the market, and although the exchange initiated recovery efforts, investor sentiment did not easily recover. On October 30th, the US spot Zcash ETF experienced a net outflow of $4.57 million, breaking an 8-trading day streak of net inflows. It is analyzed that the selling pressure from regulated products, coupled with the overall risk reduction trend in the market, amplified the decline.

The lack of clear positive catalysts also pressured the price. While there were no negative developments specific to Zcash, an ongoing public debate surrounding the funding mechanism of Zcash Community Grants did not provide a catalyst to reverse the sentiment. Technical indicators are also signaling bearishness. Zcash is trading below both its 7-day and 30-day Simple Moving Averages (SMA), and its 7-day Relative Strength Index (RSI) has entered the oversold territory at 24.77. The analysis suggests that in the absence of positive news, Zcash has become more vulnerable to the overall negative market sentiment.

In the short term, whether the $1,232 support holds is a key variable. If the immediate previous low of around $1,231.98 is maintained, there is a possibility that Zcash will consolidate between $1,232 and the 38.2% Fibonacci Retracement level of $1,270.56. Conversely, if Zcash closes below $1,232 on a daily basis, there is a risk of further decline. The 200-day SMA is located around $1,243, which should also be watched. To reverse to an uptrend, Zcash needs to reclaim $1,270.56.

Over the next 24-48 hours, the defense of the $1,232 support level is expected to determine the short-term direction. Whether concerns about hacking subside and ETF funds return to net inflows is also a variable. A resumption of ETF net inflows could be interpreted as a sign of institutional investor sentiment recovery.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*