• Millions liquidated
• Can Zcash hold it?

A 16% decline in Zcash (ZEC) sets off a liquidation frenzy. Following an explosive rally that propelled the privacy-focused cryptocurrency above $1,200, Zcash (ZEC) experienced a severe reversal. 

Millions liquidated

Leveraged traders hurried to sell their positions as the token fell about 16% from its most recent peak, causing a wave of liquidations. ZEC-related liquidations totaled $28.37 million in the last day, according to liquidation data. The majority, $23.75 million, came from long positions, while $4.62 million came from short liquidations. 

The imbalance indicates that bullish traders, after aggressively positioning for additional gains, were caught on the wrong side of the abrupt decline. During the most recent decline, selling pressure increased, and over the course of 12 hours, $11.49 million in liquidations were recorded. 

Of that amount, $9.40 million came from long liquidations. The four-hour total of $1.34 million, which included $1.19 million in short positions that were liquidated, demonstrated how quickly market sentiment changed during the erratic rally. Despite the carnage, ZEC is still technically stronger than it was prior to its breakout. 

Can Zcash hold it?

The price is trading significantly above its major moving averages on the daily chart. The 50-day and 100-day averages are about $689 and $646, respectively, while the 20-day average is close to $910. The longer-term moving average is still close to $531. However, the gap between the current price and those trend indicators also reveals the extent of the rally. 

In just a few weeks, ZEC shot up from under $500 to over $1,200, setting the stage for forced deleveraging and profit-taking. The Relative Strength Index has dropped to roughly 64 after cooling from overbought territory. Although the reading is still above neutral, it suggests that momentum has diminished. 

The $1,050–$1,100 range is probably where traders will concentrate as short-term support. ZEC might be able to consolidate and attempt another recovery if it holds that zone. If there is a clear break below it, the token may be exposed to a deeper retracement toward the $910 moving average. 

As of right now, the liquidation frenzy appears to be a reset following an incredibly rapid rise. However, ZEC's rally remains susceptible to more dramatic swings until volatility decreases and buyers reclaim the recent highs.

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