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Zcash Bound For Brief Correction After Surging 80%

By Crypto Briefing (Ali Martinez )CryptocurrencyNov 24, 2021 11:58PM ET
www.investing.com/analysis/zcash-bound-for-brief-correction-after-surging-80-200609502
Zcash Bound For Brief Correction After Surging 80%
By Crypto Briefing (Ali Martinez )   |  Nov 24, 2021 11:58PM ET
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Key Takeaways

  • Zcash appears bound for a brief correction after its price skyrocketed by 80%.
  • Zcash has risen by more than 80% over the last five days to hit $265, its highest price since May.
  • The bullish impulse was likely fueled by news that the network would transition to proof-of-stake.
  • ZEC could now be bound for a spike in profit-taking before the uptrend resumes.
  • Zcash made headlines last week after developers announced the network would move from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism.
  • Although the transition may take up to three years to complete, ZEC has gained significant bullish momentum in the wake of the announcement.

Zcash Is Back in the Green

Zcash is soaring after the development company behind it, Electric Coin Company (ECC), revealed plans to transition to a PoS consensus algorithm.

In a recent blog post, ECC's CEO Zooko Wilcox made the case to switch the network to PoS. He highlighted the need to decrease the downward price pressure on ZEC from miners and increase the token's utility. Wilcox argued that PoS would make Zcash "more decentralized, attack- and capture-resistant and egalitarian," strengthen security, and improve performance.

The transition to PoS could be "achievable within three years," according to ECC. Still, cryptocurrency enthusiasts appear to have welcomed the news. Zcash has seen its market value surge by more than 80% since the announcement on Nov. 19, going from $146 on Nov. 18 to a recent high of $265 today.

The privacy-coin could be bound for a brief correction before advancing further. The Tom DeMark (TD) Sequential indicator presented a sell signal on ZEC's 4-hour chart as prices failed to overcome resistance. A spike in selling pressure around the current price levels could help validate the bearish formation, resulting in a retracement to the $227 support before the uptrend resumes.

Zcash 4-hr chart.
Zcash 4-hr chart.

Given the rising optimism around Zcash, it would be prudent to watch out for a solid 4-hour candlestick close above $262. Breaching such a crucial resistance area can boost investors' confidence and extend the uptrend towards higher highs. ZEC could then surge towards $304 or even retest mid-May's high of $373.

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Zcash Bound For Brief Correction After Surging 80%
 

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Zcash Bound For Brief Correction After Surging 80%

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