Zcash Price Rise and Fall Explained by a 100-Year Market Theory

Source: CryptoNewsNet Original Title: Zcash price rise and fall explained by a 100-year market theory Original Link: Zcash (ZEC) token was trading at $352 on December 6, down by 53% from its highest point this year. It is hovering near its lowest level since December 31, with its market capitalization falling from over $11 billion to $5.8 billion.

Wyckoff Theory Explains the Zcash Price Rise and Fall

To an ordinary person, the recent Zcash price surge and the ongoing freefall appear to be a random event. However, to market technicians, this surge and fall was a long time coming.

The rally happened because of a 100-year-old technical concept known as the Wyckoff Theory. This theory explains how assets emerge from consolidation, rise, and then fall eventually.

The weekly chart shows that the ZEC price went nowhere for over three years. Its tight consolidation meant that it never participated in the mini bull runs that happened in this period.

Zcash, like other privacy tokens, remained in a tight range because of regulations and the fact that many exchanges delisted it.

Therefore, the Zcash price was in the accumulation phase, which is characterized by sideways movements. It entered the markup phase in September, a move that was sparked by a major fund application for Zcash.

Now, the token has entered the distribution and markdown phases. These phases started when the token formed a double-top pattern at $740, leading to panic selling among holders.

It has now formed the three black crows pattern, which is characterized by three consecutive bearish candles.

Looking Ahead

Looking ahead, the token may experience a relief rally now that it has retested the important support at $305, its highest point in November 2021. This may happen ahead of potential regulatory approvals for ZEC ETF products.

Such a rebound will likely be a dead-cat bounce, which happens when an asset in a freefall experiences a brief rebound and then resumes the downtrend.

A drop below that support will point to more downside, potentially to the next key support level at $215, its highest point in March 2022.