Zcash faced rejection at $251 and lost the $250 support level shortly after. Since then, the altcoin has closed at lower lows for three consecutive days, touching a low of $205.
At the time of writing, Zcash [ZEC] was trading at $207, down 8.29% on the daily charts. Thanks to a sustained decline, ZEC fell further below its short-term and long-term moving averages, indicating intense downside pressure.
Buy-side liquidity shrinks as sell pressure intensifies
Following an extended bearish streak across the market, Zcash holders started to close their positions while speculators stepped back. In fact, the market saw higher sell-side volume, as evidenced by the Spot Taker CVD.
The altcoin faced massive selling pressure below $250 as short-term holders capitulated and began closing positions.
In the last 2 days alone, downside pressure, as sellers defended $210, contributed to a significant decline and repelled any attempt to move above it.
Source: CryptoQuant
At the same time, Buy Sell Volume to Price Pressure has remained negative for two consecutive days.
At press time, the VPO1 sat around -22, while VPO2 sat around -10. Here, a negative value means that pressure to price for both sellers and buyers is negative. As a result, even the net buy has been negative, suggesting that selling pressure was dominant over buying pressure.
Source: Tradingview
Coupled with that, the Demand Index also fell into the negative zone. It had a reading of -25, hinting at a weaker demand relative to supply. With the index negative and trending downward, it further seemed to support the ongoing market decline.
Traditionally, weak demand and a hike in supply have accelerated downside momentum, resulting in lower prices. In fact, the altcoin’s momentum indicator was indicative of this bearishness.
Source: Tradingview
For starters, the altcoin’s Stochastic Ergodic Indicator (SMII) made a bearish crossover, falling to -0.23. When this indicator falls into the negative zone, it alludes to strong downside risk, with sellers commanding total market control.
Historically, such market conditions have preceded lower prices too.
Retail attempts to absorb the rising pressure
Despite the sustained market weakness, some investors on exchanges have taken the opportunity to accumulate at a discount.
In fact, CoinGlass revealed that over $48.3 million flowed out of exchanges compared to $43.9 million in inflows over the past 3 days. This period coincided with a significant drop in ZEC’s price charts, with the same highlighting greater dip buying.
Source: Coinglass
The hike in accumulation provides ZEC with much-needed relief and could help the altcoin avoid further declines. Often, higher buying pressure helps absorb market pressure, boosting asset’s upside potential.
Therefore, if demand becomes significant and finally manifests in the market, ZEC could see a trend reversal and reclaim its short-term resistance at $238.
However, if the prevailing trend continues, with sellers overwhelming the market, Zcash is likely to breach the $200-support and drop towards $185.
Final Summary
- Zcash’s [ZEC] bearish streak is persisting, with the memecoin dropping by 8.29% to a low of $205.
- ZEC saw low buy-side liquidity and intense selling pressure, threatening a dip below $200.
