Zcash Price News: Solid Bounce Off $500 Could Push ZEC to $1,000

Zcash (ZEC) has gone up by 2.3% in the past 24 hours after bouncing strongly off the $500 threshold.

Trading volumes rose by 58% during this period, indicating that buying pressure at this key level remains strong.

In our latest Zcash price prediction, we emphasized that this support level was the most relevant after the token started to pull back.

ZEC failed to hit $700 during the latest rally but came quite close. The selling pressure at that key resistance quickly pushed it to the current levels, but we still think that buyers will back the rally and ultimately drive Zcash’s price to $1,000.

Zcash Open Interest (OI) Rises to a New All-Time High

We mentioned Arthur Hayes’ forecast about ZEC as a hint of what influential market participants appear to be envisioning for this privacy token.

Hayes believes that ZEC will rise by 5X over the next few months as the government’s grip on cryptocurrencies will likely increase.

Anonymity will be sought by key players, and Zcash is favorably positioned to capitalize on that trend. Meanwhile, we have been tracking how speculative behavior around this token has been increasing recently.

One metric we use to measure this is the percentage of shielded tokens. When that metric drops, it tends to indicate that speculative interest is rising. The percentage of ZEC that is currently shielded rose to 20% last week.

This is very near normal readings and indicates that speculators took a breather as a result of this pullback. Recently, that same metric dropped to 10%, back when ZEC rose to $700.

Meanwhile, open interest (OI) in Zcash climbed to a new all-time high in late May at $1.70 billion, and it is still sitting at very high levels from a historical standpoint, at $1.20 billion.

Zcash Could Double Its Price If The $500 Floors Holds

Heading to the chart, we were already expecting this pullback, as the Relative Strength Index (RSI) flashed a bearish divergence. This happens when the price of an asset makes a new high, but positive momentum is weakening.

However, we liked yesterday’s green candle as it indicated strong interest from buyers at $500. In addition, the RSI in this lower time frame is still above 50.

Unless the oscillator drops below 40, we can safely say that bulls are still in control of the price action. For that to happen, the $500 floor must be broken.

Our signals system has flagged five consecutive “buys” in this higher time frame, and that is the reason why we continue to be bullish, as institutions and deep-pocketed players have been frantically buying this token every step of the way.

The last of these buy signals occurred as ZEC hit $700. This typically indicates that the rally has hit its “exhaustion” phase, especially as it happened alongside the bearish divergence we mentioned before.

Hence, we see this recent drop as a normal pullback caused by early buyers cashing out on their profits. Meanwhile, this decline to $500 is giving late buyers another chance to enter the rally at a much more advantageous price point.

These additional volumes should be strong enough to drive ZEC to $1,000 in the near term.