Zcash (ZEC) is facing renewed downside pressure after a fresh technical rejection, as traders assess the asset’s next directional move following a strong impulsive rally earlier this cycle.
On Sunday, January 25, crypto analyst Rose Premium Signals noted that ZEC is hovering near a critical decision zone, where the asset’s next major trend is likely to be determined.
In addition to this, Rose Premium Signals also revealed that ZEC has been rejected from the 0.618 to 0.786 Fibonacci retracement range, which is a key range monitored by technical traders as a high-probability zone to look out for as a potential source of resistance.
The rejection from this range indicates selling pressure is starting to emerge around this zone, meaning supply is starting to outstrip demand.
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If ZEC fails to reclaim and hold price above the Fibonacci resistance, it could enter into a state of correction. In that instance, there are chances that it could pull back to support at 324. In addition, in the event that bearish momentum builds, it could fall as low as 82 in an acceleration scenario.
On the flip side, the bearish view would be made irrelevant if ZEC is able to post a strong close on the weekly chart and manage to overcome the Fibonacci resistance level. This would mean a strong increase in buying pressure and a potential resumption of the bullish trend.
According to the TradingView data, as of Sunday, January 25, the MACD also validates the bearish trend, as both lines are below zero, indicating that there is downward momentum in the market.
Although there are signs of selling pressures abating, as indicated by the shrinking histogram, it has not moved into positive territory, indicating that there has been no change in trend.
Currently, RSI is in the mid-30s, which is lower than its normal level, indicating low interest in buying and increasing interest in selling. Despite RSI being in oversold territory, it has not shown a divergence, which usually represents low buying interest. The RSI readings usually indicate price continuation in a trend.
Also Read: Zcash (ZEC) Crashes 8%: Is $330 the Next Stop Before a Massive Rebound?
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