Key Points:
Zcash has shown a parabolic rise, with a monthly increase of 520%, pushing it into an extremely overbought zone.
The ZEC price needs to hold above $245 to continue the push towards $336.
Zcash (ZEC) has surged over 520% in the past month, resisting the overall sell-off in the crypto market, which forced about $20 billion in leveraged positions to be liquidated over the weekend.
This privacy coin has performed strongly, with prices nearing the $300 mark, the highest level since December 2021. As a result, ZEC has become one of the best-performing coins in the market.
Can the ZEC price rise further from the current level, or does it need to cool down?
The recent explosive upward trend of Zcash is currently consolidating in a classic flag pattern, which typically indicates the potential for further upward movement.
The latest K-line on the four-hour chart has formed a gravestone doji near the upper trendline resistance, indicating that the price may temporarily pull back to the lower edge of the flag, around $237.
If buyers push the price above the upper trendline of the flag, ZEC may confirm a bullish breakout. This move would set a technical price target for October, close to $336, about 25% higher than the current level.
This pattern further aligns with a healthy consolidation above the 20-period (green) and 50-period (red) exponential moving averages (EMA), indicating that despite short-term overheating signs, the overall bullish momentum remains intact.
The ZEC price is falling between support levels, namely the lower trendline of the flag and the 20-period EMA, increasing the likelihood of a drop to the 50-period EMA around $210.75 in October.
As shown in the CoinGlass chart, approximately $5.36 million in cumulative long liquidations is stacked around $244, making it a key risk area for bulls.
A drop below the $244 threshold could trigger a series of forced long liquidations, deepening the pullback before a potential rebound.
In simple terms, this is where many traders' stop-loss or liquidation points are waiting to be triggered, which could push the ZEC price towards the aforementioned $210.75 target.
The bearish scenario also relies on Zcash reaching its most overbought level on the weekly chart, which could lead to a short-term pullback in the coming weeks.
As of Monday, ZEC's weekly relative strength index (RSI) exceeded 92, setting a new historical high.
The previous RSI peak was 78 in April 2021, after which the ZEC price fell nearly 70% over the following months.
A similar cooling phase may follow, especially if the price fails to establish solid support near the $245 level, which is the 0.786 Fibonacci retracement level.
On the other hand, a rebound from the $245 support could push the price up to $307 or higher, retesting ZEC's high of about $375 from 2021.
Analyst Altcoin Sherpa stated that any drop to $200 could be a "buying" opportunity, suggesting that these lower levels may form a bottom in the coming days.
"If the price comes to $230 or lower, I would be interested," he added.
Related: Economists say that if history repeats itself, Bitcoin (BTC) may rebound by up to 21% within seven days after a drop.
Original: “Zcash Monthly Gains Reach 520%: Can the ZEC Price Rally Continue?”
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