Key Takeaways
Why is ZEC in distribution?
Top traders taking their profits as well as the structural dilemma could be some factors igniting bearish sentiment on Zcash.
What’s next for ZEC’s price?
ZEC could revisit 2017 highs if momentum does not fade or retest the broken consolidation at lower levels.
Zcash [ZEC] has regained the momentum it had in 2021, which allowed the altcoin to reach highs in the $400 range last week. However, the strength seems to be fading and the altcoin seems to be entering a distribution phase.
ZEC continues to see much traction, especially in CT, where its talks seem not to be fading. The attention draws strength to the altcoin, while on-chain data starts to show weakness.
Zcash enters distribution phase
According to data from CryptoQuant, Zcash is entering a distribution phase, as seen in the Spot Volume Bubble Map, which is overheating. The metric has been neutral since when ZEC was trading below $100.
While the metric does not ascertain the next outcome for the price of the cryptocurrency, the reading was a hint of potential price weakness.
More often than not, prices tend to enter into pullbacks or consolidations, especially now that they are around previous highs.
Source: CryptoQuant
Capital transfer and profit-taking activities have triggered this bearish sentiment. The analysis showed capital was moving from whales to retail.
Take-profiting surge, but here’s the twist!
Further analysis indicated that top traders were selling their holdings. One such was CryptoQuant founder Kate The Alt, who expressed this on X (formerly Twitter). The analyst wrote,
“Started selling my zcash bags. Sorry but you’re retail if you’re buying zcash now.”
The high spot retail activity supported this observation. Historical data showed that retail trader activity was high when ZEC prices reached their seasonal peaks.
This further indicated that caution was needed for those wishing to enter ZEC trades at the moment.
However, there was still confidence in the potential for price continuation because institutions continued to hold their positions.
As per CoinGlass data, Grayscale Zcash Trust still held almost 400K ZEC valued at $132.5 million when writing.
Source: CoinGlass
With that in mind, it suggested the price could coil in either direction after the current scuffle between bulls and bears.
Will ZEC’s price hit 2017 highs next?
On the charts, ZEC had hit 2021 highs, producing more than 5x returns in just a month. This after the price broke above the consolidation that started in mid-2022.
In case the price broke and stayed above $372, ZEC could target 2017 peaks around the $750 to $900 zone, exceeding AMBCrypto’s earlier target of a 100% surge.
Alternatively, ZEC could dip to retest levels around $260 or lower. A successful breakdown below the 200 EMA would mean the end of the bullish trend.
Source: TradingView
At the time, ZEC was exhibiting a bearish sentiment, suggesting a period of uncertainty. Still, the bullish structure was intact but needed to break $372 to ascertain continued strength.
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