Zcash leads the crypto market’s gains on Wednesday, surging to levels not seen in six months. The uptrend is still ongoing, meaning it may surge even higher.
It opened at $573 and surged above its recent high at $645. It peaked at $688, but trades slightly lower at the time of writing. Despite the slight rejection, the altcoin is up by almost 19%.
The recent surge and return to trading above $650 have sparked significant reactions from traders. Some are expecting more increases, and others are left stunned by the sudden uptick. Some are even taking it a step further, predicting that ZEC could follow BTC’s path.
While the reactions have been mostly bullish, the reason for the hike remains a mystery to a few. The sudden spike was due to a recent victory against the US SEC. The authorities have been probing the company behind Zcash, but recently closed their investigation without penalties.
The news thrilled its holders, resulting in a buying frenzy. According to CoinMarketCap, trading volume increased by 52% increase in trading volume over the last 24 hours. Interestingly, the buying continued even above $680.
Recent data from MMT shows that investors accumulated a whopping 17k units worth $11.5 million at the time. However, buying pressure has significantly declined, as evidenced by the recent decline.
Will the Zcash Uptrend Continue?
Still on the data in the chart above, focusing on the orderbook reveals a growing number of sell orders at $680. This means the upward trend is gradually waning as some traders take profits.
The asset is currently grappling with notable selling pressure below $680. If the sell orders continue to build, the altcoin will slip even lower in the coming hours.
Aside from current orders, it is worth noting that the recent hike was a short squeeze. Over the last 24 hours, traders lost over $28 million. The liquidated shorts accounted for over 90% of the total rekt funds. Interestingly, this is the second-highest liquidation over the last 90 days.
Expanding on the short squeeze, Ted noted that the recent uptick was not due to Zcash “suddenly solving adoption, liquidity, or regulatory headwinds overnight.” He added that another fuel was “the privacy narrative” becoming “hot again.”
Following Wednesday’s massive surge, the asset may lose momentum over the next 24 hours. Given the recent short squeeze, longs are piling. Recent data from MMT reveal increased perps longs above the current prices. With longs piling, the chance of a long squeeze increases.
That may play out in the coming days for several reasons. It is no news that when an asset sees notable increases, as seen over the last few hours, the chances of traders taking profit afterward increase.
On the 1-day, Zcash recently tested bollinger’s upper band. It will veer closer to the middle band and the lower band afterward if the bulls fail to defend the mark. Additionally, the asset is overbought at the time of writing. RSI surged above 70 for a few hours and is due for a retracement.
In summary, there are several telling signs that the altcoin is gearing up for a massive decline. It risks slipping to $460 if the bulls fail to defend the SMA.
