Zcash, the 31st largest cryptocurrency by market cap, has rallied +20% the last two weeks. The digital asset fell off the radar in March this year when it hit its all-time low, but an upcoming fundamental shift is drawing back the attention. Why are investors starting to focus on Zcash again?
Zcash Price
At the time of this reporting, Zcash is trading at $68.02. It has been a wild year for ZEC, as the 31st largest crypto by market cap put in its all-time lows in March of this year. After dropping to $19.70 levels, Zcash has slowly built significant momentum since March lows. Despite Zcash losing a lot of interest earlier this year, many investors have essentially lost out on the recovery. Over the last year, Zcash has managed to grow +81%. This is outperforming Bitcoin, which has only seen +32.6% growth.
Zcash Fundamentals
Despite ZEC being correlated to Bitcoins recent upside, there are other reasons that Zcash is rallying of late. In the next 37 days, Zcash will be experiencing its halving. Similar to Bitcoins halving that occurred in May of this year, Zcash halving event occurs every 4 years on the Zcash blockchain. This is an anticipated event since the halving will result in Zcash’s inflation rate being cut in half. ZEC total supply is capped at 21 million just like Bitcoin. The upcoming halving will slash rewards per block mined from 6.25 ZEC to 3.125 ZEC.
Back in August, it was reported by CoinTelegraph that ZCash had the highest inflation rate among large cap cryptocurrencies. This was a red flag for investors with ZEC introducing “disproportionate” amounts of supply to the market.
Aside from some major inflation concerns being addressed, cryptocurrencies in general have historically done well following their halving. Investors seem to be eyeing ZEC right now, with the hope of getting in early before the next leg up.
ZEC Technical Analysis
ZEC price recently jumped off $62 support and is eyeing resistance at $72. As long as ZEC does not reject $62 support, it should continue to build upward momentum going into the halving. Additionally, if ZEC were to surpass $72 resistance, watch for a quick move to mid $80s.
At the bottom of the chart we have outlined ROC, which is rate of change. Most recently, ZEC price has inched above 0 which represents bullish momentum. If one follows historical price action, ZEC has seen significant upside following ROC going positive. Despite Zcash looking bullish in the short-term, it is important to keep an eye on key support levels. As mentioned above, if ZEC were to reject $62, the positive sentiment could change relatively quickly.
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