ZECUSD analysis: Zone of High Pressure

Dear friends,

I go on my series of cryptocurrency price predictions and today I’d like dwell upon Zcash prospects and analyze the ZECUSD trend.

As you see from the chart above, privacy-based cryptocurrencies perform worse than the benchmark, Bitcoin. But Zcash seems to be the strongest coin, compared to the others.
What does this strength result from and what is Zcash future? Let’s try to find out. I will start with analyzing the fundamental factors for the cryptocurrency.
First, I’d like to note that Zcash developing team is continuously working on the network updating and improving, to make the coin the safest and the most confidential one.
For example, they are planning to develop another updated network version, called Sapling.
In general, the developers’ activity suggests that Zcash is much different from its privacy-based peers in these terms.
They have been especially active during the last summer months when ZEC development was the most active (see the chart here), compared to the decline in the activity and development of Monero and Dash (see the chart here).
On the other hand, the gradual displacing of confidential cryptocurrencies from the Japanese and the South Korean markets still has its influence, being the major negative fundamental factor.
Another negative factor is the danger of the 51% attack, coming from the developing ASIC industry.
Finally, I can conclude that Zcash rate is affected by external factors that are equally negative for all privacy-based cryptocurrencies.
Zcash strength, compared to the other coins, can be explained by its developers’ incredible effort to create a high-quality product. Their commitment to the network ideals and the desire to make the coin as confidential as possible despite everything is respected by the users and deserves great trust in the community.
Now, I suggest we apply technical analysis.

In the ZECUSD monthly chart above, it is clear that within the current month, there emerged a long black candlestick that broke through the key level of the September's low at 142 USD.
The next key support for ZECUSD will be 88 USD, which already suggests high risk to the middle-term traders.

In the ZEC weekly chart, ZECUSD ticker is below Keltner channel’s bottom border. Besides, MACD oscillator is at the window bottom. Total trading volume is very lower and is declining by each weekly bar. In addition, buy orders are getting less, and number of shorts is consistently low.
All of this indicates that buyers are not interested in ZEC and are withdrawing their funds from the market, or they may not enter any trades, waiting for reversal signals.
In the chart above, I tried to present the most obvious buy signals for bulls:
1. a white candle emerges in the weekly chart;
2. trading volume is increasing;
3. the number of buy pending orders is increasing;
4. MACD is sending green signal by meeting of its moving averages.
If all the four conditions are fulfilled, it would be the most accurate buy signal; but now, you should wait.
To understand how long we are to wait, let’s look at the shorter timeframes.

In the ZECUSD daily chart, it is clear that ZECUSD ticker is trading in the wide local bearish channel. MACD indicates emerging of a bullish convergence inside the channel. In addition, it is clear that the downtrend’s angle of descent and its length, in general, looks like the fractal of the previous cycle; and so, inside the pattern, ZEC price is going to continue declining down to the next key level at around 88 USD – 100 USD, where from it is likely rebound towards the channel’s top border at around 150 USD -175 USD.
However, taking into account the timeframe scale, we shouldn’t be too hasty. This scenario is for quite a long term and indicates the target for the next two months. So, you shouldn’t enter any trades too early.
Going on my experiment with Renko, I have the following situation in the hourly charts.

In the 4H timeframe of Renko chart (the right one), the most appropriate box size is 15 USD. With this box size, MACD sends the least number of false signals (marked with blue crosses).
As you see, MACD is a sending a sell signal now, and there are no buy signals.
However, you can see an emerging bullish convergence (marked with the light-blue line), which is an early sign of a soon bullish retracement.
I should note that MACD in the candlestick chart of the same timeframe (the left chart) is in the sideways trend and isn’t sending any clear signals, but the moving averages prove the Renko signals and indicate the correction development.
Summary:

Unfortunately, I can’t yet suggest the trend reversal and a fast Zcash price rise. Fundamental factors will hinder it in the near future. On the other hand, there are first signs of an emerging bullish correction inside the bearish channel. I think the low at 118 USD is highly likely to be retested.
I should note here that the market makers haven’t demonstrated themselves for a long time and can well organize a pump if they understand that the market has met a strong foothold and isn’t going to move lower.
ZECUSD can well find this strong support level at 100 USD. This level is not marked, but it is psychologically important.
The consolidation in this zone will form a foundation for the bulls’ attack, which should finally complete the fractal of the recent cycle, drawing ZEC price up towards the channel’s top border.
That is my trading ZECUSD scenario.

Good luck and good profits!
Best regards,
Mikhail @Hyipov

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