Zcash price has lost momentum, plummeting 32% from year-to-date highs, and technicals point to further downside despite significant news from Grayscale.
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Zcash price has fallen 32% from this year’s high. Grayscale has applied to convert the ZEC Trust into an exchange-traded fund. Technical analysis suggests that there is further downside for the token.
Zcash (ZEC), a leader in the privacy industry, is trading at $503 as of Wednesday, November 26th, with a market cap of $8.29 billion, up from a year-to-date high of $11.4 billion.
Zcash’s price fell even after Grayscale filed an S-3 form to convert the trust into an exchange-traded fund (ETF). This is an important step as ZCSH will be the industry’s first Zcash ETF.
The trust, which has an expense ratio of 2.50%, manages nearly $200 million in assets.
Grayscale has successfully converted several trusts into ETFs, including assets such as Bitcoin (BTC), Ripple (XRP), and Solana (SOL).
Private funds are only available to accredited investors, so converting such trusts into ETFs makes them available to a wider range of investors.
Zcash price has been one of the best performing in the cryptocurrency industry over the past two months. The rally began after Grayscale announced the launch of ZEC Trust.
Since then, data shows the number of shielded supplies has surged and its growth has accelerated. Supply has jumped to more than 4 million units from less than 3 million a few months ago, according to data compiled by Zechub.
Technical analysis of Zcash price suggests a pullback
The weekly timeframe chart shows that ZEC price remained in a narrow range between $15 support and $77 resistance from June 2022 to September this year.
This consolidation indicates that the coin was in the accumulation phase of the Dow Theory. This stage is characterized by low volume and low volatility.
This is followed by the markup phase of Wyckoff’s theory, which is characterized by a surge in demand. It entered a price increase phase in late September, skyrocketing from less than $50 to an all-time high of $742.
There are now signs that Zcash price has moved into the distribution phase of the Dow Theory. This stage is characterized by downward pressure as investors begin to take profits. ZEC is also forming a double top pattern on the daily chart.
Therefore, the most likely scenario is that the token could crash and reach the 50% Fibonacci retracement level of $380 as investors panic and sell. A move below this level could signal further downside and lead to the 61.8% retracement at $295.
