Zcash Faces Critical Retest at $1,350. Will it Surge to $1,500?

Zcash has maintained an uptrend for most of the last four days. Cumulatively, it has surged by more than 23% during this period and is now approaching a critical resistance level.

Looking closer, Tuesday was the most bullish session, with the asset gaining a whopping 7% and recovering almost all the previous day’s losses. Although momentum slowed during the following session, ZEC resumed its upward movement on Friday. It is currently up by almost 6% and recently broke above its seven-day high.

Beyond price action, one factor many would expect to contribute to the current rally is ZCSH, Zcash’s spot exchange-traded fund. However, the fund continues to record outflows. On Monday and Tuesday, it recorded combined negative netflows exceeding $7 million. Wednesday brought some relief, but selling pressure returned the following day.

With ETF flows failing to explain the rally, attention shifts to the spot and perpetual futures markets, both of which are showing notable bullish activity. One potential catalyst is the growing interest surrounding Zcash’s latest network upgrade.

NU7 is the latest upgrade, which will reduce the target block time from 75 to 25 seconds and shorten the three-confirmation wait to 75 seconds. It will also introduce a new incentive structure for miners, allocating 40% of transaction fees to them while directing the remaining 60% into a reserve.

The upgrade went live a few hours ago, coinciding with the latest upward movement. Interestingly, traders across the derivatives market lost more than $427 million to liquidations. While long positions accounted for most of the losses across the broader market, ZEC recorded a different pattern.

Zcash perpetual futures saw $15.7 million in liquidations, with short positions accounting for most of the losses. This suggests that bearish traders were caught off guard by the latest rally, potentially adding to the upward pressure.

However, the coin is now approaching a critical price threshold. Whether it can break through and sustain its position above this level remains to be seen.

Zcash Eyes $1,500

Zcash surged to a high of $1,385 but encountered resistance shortly afterward. Looking at the broader chart, the asset has broken above $1,350, a level it struggled to decisively reclaim over the previous 30 days.

Although another breakout has occurred, it is too early to determine whether it will hold. ZEC is currently trading close to this mark and could end the day above it. Consecutive bullish daily closes on Saturday and Sunday would provide stronger confirmation of the breakout.

If that happens, a move above $1,500 becomes increasingly likely. However, reaching this target first requires breaking through the $1,470 resistance.

The technical indicators present a mixed picture. The Relative Strength Index (RSI) suggests there may still be room for further gains, but the momentum indicator has yet to show a corresponding improvement.

Additionally, the altcoin has not decisively broken above its 50-day moving average. Reclaiming this level would provide another confirmation of strengthening bullish momentum and improve the chances of a move towards $1,500.

Despite these encouraging developments, there are no definitive bullish signals across the indicators. In fact, some metrics suggest that the rally may be overheating. One such indicator is the Bollinger Bands. ZEC recently moved above the upper band, suggesting that prices have extended beyond their recent trading range.

Price action since October 21 also provides an interesting perspective. The asset has largely traded between the upper and lower bands, making its latest move above the upper boundary particularly important. If prices return within the bands, it could signal weakening momentum and increase the likelihood of a correction.

Should selling pressure return, a retracement towards $1,120 is possible within the next seven days.

Overall, Zcash is approaching a critical turning point. While the latest fundamental developments and derivatives activity support the bullish case, technical indicators have yet to provide convincing confirmation of a sustained breakout. A decisive move above $1,470 would strengthen the case for $1,500, while a loss of momentum could expose the asset to a decline towards $1,120.

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