Zcash (ZEC) recently faced a significant setback, falling 16% from its peak and triggering a wave of liquidations in leveraged trades. Within the last 24 hours, the total value of ZEC-linked liquidations reached $28.37 million. Of this, a major portion—$23.75 million—originated from long positions, while short positions contributed $4.62 million to the liquidation total.
Were Long Positions Unprepared?
Indeed, the data suggests that investors betting on continued price growth found themselves caught off guard. As prices fell, the selling pressure intensified, leading to liquidations of $11.49 million within just 12 hours, with $9.40 million coming from long positions.
Market volatility was also evident in shorter time frames. During a four-hour period, liquidations amounted to $1.34 million, with short positions accounting for $1.19 million. This underscores how rapidly market sentiment can shift after a sharp rally.
The imbalance in ZEC liquidations reveals that long positions, speculating on continued ascent, faced intense pressure from the sudden downturn.
Is the Bullish Technical Outlook Intact?
Despite the sudden sell-off, ZEC’s technical indicators show a more robust picture compared to the pre-breakout phase. On the daily chart, the price remains above key moving averages. The 50-day average hovers at $689, the 100-day at $646, and the 20-day around $910, while the longer-term average stands near $531.
Meanwhile, the significant gap between current prices and these trend indicators highlights the rapid velocity of the recent upswing. ZEC soared from below $500 to over $1,200 in a matter of weeks, triggering both profit-taking and compulsory leverage reduction.
Support Zone Under Scrutiny
The Relative Strength Index retreated from the overbought area, dipping to around 64. Although it remains above the neutral threshold, this indicates a momentum loss compared to previous levels.
In the near term, the $1,050 to $1,100 range is considered a support zone. Should ZEC stabilize in this band, the market could witness a balance attempt and a potential recovery. A definitive break below this zone may lead to a deeper pullback towards the 20-day moving average at approximately $910.
The recent fluctuation gives the impression of reset after a swift ascent; yet, price movements might remain volatile until the market calms and buyers reclaim recent peaks.
- Over $28 million in liquidations occurred due to ZEC’s price drop.
- Long positions contributed most to the losses.
- Current technical indicators still show strength above long-term moving averages.
- The RSI suggests waning momentum, though still above the neutral line.
ZEC, a cryptocurrency centered on privacy, has once again demonstrated the rapid directional shifts possible in leveraged trades. Presently, market attention is keenly focused on whether key support levels can be maintained and how quickly volatility might settle.
