Zcash (ZEC) has been trading relatively range-bound in the past few days but remains within our designated buy zone ahead of the rollout of the NU7 upgrade in the blockchain’s mainnet.
The project’s dev team already set a date for NU7 to go live on November 5. This technical overhaul will reduce transaction settlement times from 75 seconds to 25 seconds, making this privacy chain much more efficient.
This week, the Alpenglow upgrade was successfully implemented on Solana as well, as blockchain projects continue to strengthen their use cases at a point when institutional and mainstream adoption is increasing.
Zcash ETFs See Strong Recovery in Net Inflows
ZEC has been one of the top-performing assets in the crypto space this year, with a 136% gain as its privacy feature has been in high demand.
Even though the project suffered a temporary setback after a weakness in its code was revealed, the launch of the Ironwood pool patched this vulnerability, and users quickly migrated to this new version.
According to on-chain data from ZecHub, usage of its shielded pools has been increasing once again in the past couple of weeks, jumping from a recent low of 39% to 50% at the time of writing. This percentage is just 6% below the project’s latest peak, indicating that demand for this feature continues to be strong.
Meanwhile, we have seen a steady recovery in net inflows to exchange-traded funds (ETFs) linked to ZEC this week.
According to data from SoSoValue, investors have poured $21 million into these vehicles during the first four days of this week, marking the third consecutive week of improvement for this metric.
In addition, inflows have been positive for three days in a row, as ZEC bounced strongly off the $1,100 level once again.
ZEC Needs to Break Past $1,400 to Resume Its Rally
Turning to the 4-hour chart, we can see that ZEC has experienced strong buying in the discount zone of our designated “hot” buy area.
We believe that there’s an ongoing process of accumulation at this level that could create a strong floor for the token to resume its rally in the near term.
Macroeconomic conditions are relatively stable at this point, as the market does not expect any changes to the U.S. monetary policy during next week’s FOMC meeting. Odds of a rate hike according to FedWatch are sitting at just 8% as of today. Hence, we could expect that this recovery may continue.
To confirm a reversal, the price action would have to push ZEC above $1,400. In that scenario, we expect that the price will retest the $1,700 ceiling in the near term.
Positive momentum seems to be picking up its pace, as the Relative Strength Index (RSI) just climbed above the signal line — an early signal that buyers are starting to pile up.
As long as the $1,000 floor holds, we maintain a bullish outlook for ZEC. Otherwise, if that key support is broken, the odds of a much stronger correction to around $807 will rise dramatically.