Key Insights:
- Zcash’s price has gained 10.2% in the past 24 hours, reflecting a strong recovery after a sharp decline.
- The 0.618 Fibonacci retracement level offers a critical support zone for potential short-term recovery in Zcash price.
- Increased trading volume during price bounces suggests growing demand, increasing the chances of a relief rally if support holds.
Zcash has shown signs of stabilization following a sharp decline earlier this month, with its price currently hovering around $363.02. The cryptocurrency experienced a significant drop after peaking in November but has since found a major support zone that may offer opportunities for a relief rally. As of now, Zcash has posted a 24-hour gain of approximately 10.2%, signaling a potential recovery from its recent lows.
One of the key developments in Zcash’s price action is its bounce from the 0.618 Fibonacci retracement level. This technical zone is crucial for swing traders, as it marks a common area for oversold reversals. Cryptocurrency analyst Altcoin Sherpa identified this Fibonacci level as a critical point for potential price recovery. The structure of the market—featuring a steep decline followed by a V-shaped rebound and rising volume during recoveries—aligns with a typical swing-low pattern.
Rising Volume Indicates Potential for Demand
The increased trading volume observed during intraday recoveries further supports the idea that demand is returning to the market. This uptick in volume has contributed to the formation of higher lows on lower timeframes, suggesting that selling pressure may be diminishing. As Zcash moves away from its recent lows, the potential for a technical relief rally looks more likely, particularly if buyers can maintain support above the 0.618 level.
While Zcash is positioned for a possible short-term rally, the cryptocurrency faces resistance at key levels established during previous price breakdowns. Analysts caution that if the 0.618 Fibonacci level fails to hold, further downside may occur, which would invalidate the current bullish outlook. However, as long as the market maintains support at this technical region, the probability of a bounce toward higher mid-range levels increases.
Short-Term Bounce Seen as Likely, No Expectation of New Highs
Despite the promising short-term outlook, Sherpa does not expect Zcash to reach new all-time highs anytime soon. The analyst views the current pullback as an opportunity for a relief rally rather than a sustained upward trend. The market structure supports a potential mid-term bounce if sentiment remains favorable and if Zcash holds above the crucial Fibonacci level. However, any breakdown below this level would likely lead to further weakness in the market.
