Zcash Price Forecast: Social Metrics Flash Buy as ZEC Hits Resistance at $525

Zcash (ZEC) has dropped by more than 6%, but it is currently one of the top-performing tokens in the top 10 in the past 30 days with a 25% gain.

This privacy token managed to recover from the hit it took in early June, back when the developing team uncovered a technical weakness in the blockchain’s coding that allowed exploiters to mint an unlimited amount of ZEC without anyone noticing.

We anticipated this recovery as there was strong demand for the asset at $250, and volumes seem to have been strong enough to push the price back to $500 by squeezing bearish bets out.

Now that we have hit this resistance, market participants need to decide if they are willing to resume the rally that once pushed ZEC to $700 or dump the token and cash out of a handsome 100% gain for those who bought June’s extreme dip.

Social Metrics Say “Buy” as ZEC Mentions Spiked Recently

Data from Santiment indicates that social volumes have been increasing recently. By analyzing the 7-day and 30-day moving averages for this metric, which tracks how many times a specific token is mentioned across multiple social channels, we spotted a buy signal that has anticipated strong price movements in the past.

Just a couple of days ago, the 7-day MA crossed above the 30-day MA. The last time this happened, the price rose from $400 to $600 in just a few weeks.

This makes sense as Zcash’s price action is highly influenced by FOMO and social narratives. Right now, the “Zcash use case is intact despite the exploit” narrative seems to be what’s driving the price to higher levels.

The developing team quickly patched the weakness, and the latest security audit did not identify any other vulnerability.

On-chain metrics also show a strong spike in ZEC’s shielded supply, which is the percentage of the token’s circulating supply that is locked in one of its vaults. At 32%, this is the highest level that this metric has reached since February this year, back when it rose to 35%.

What this indicates is that the public continues to rely on ZEC to mask their transactions in the crypto space, which provides some degree of confirmation that this “use case is intact” narrative could be true.

Zcash Could Drop to $390 If It Fails to Move Above This Key Resistance

Looking at the daily chart, the price action clearly rejected a move above a key level that has acted as both support and resistance in the past at $525.

This sell wall could mark the beginning of a downtrend if the price keeps dropping sharply in the following days.

On the other hand, if we get a bullish breakout above this level, the odds of a retest of the most recent highs of $675 will increase dramatically.

Our baseline scenario for ZEC was that the early-June bounce was gonna drive Zcash’s price back to $500, as it has. However, we see this as the backstop for the rally, primarily as market conditions are still unfavorable for cryptos as a whole.

Hence, we expect a drop to $390 in the near term if this rejection is confirmed, meaning a 24% downside risk.