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ZCash: Amid a bearish divergence, here’s where you can expect a pullback

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ZCash exhibited a bearish divergence, here is where the pullback can be bought

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Zcash showed a bearish divergence on lower timeframes but has also flipped a zone of supply to demand in recent days. Despite Bitcoin exhibiting a strong drop from $42.7k to $40.7k, ZCash was not affected much negatively. However, further bearish sentiment across the market might force ZEC to drop as well.

ZEC- 1 Hour Chart

ZCash exhibited a bearish divergence, here is where the pullback can be bought

Source: ZEC/USDT on TradingView

In white is a curve showing the price closing at higher highs on an uptrend. Examining the market structure on lower timeframes we can see that the bearishness of April has been broken in the past few days.

The $156 level was the most recent lower high of the previous downtrend, and it has been broken and ZEC has also managed to flip the $159 area (cyan box) from supply to demand. At the same time, the price has also formed a series of higher lows, to suggest a bullish trend over the past two days.

Rationale

ZCash exhibited a bearish divergence, here is where the pullback can be bought

Source: ZEC/USDT on TradingView

The RSI made lower highs (white) even as the price pushed higher. This could see a pullback for ZEC. At the time of writing, a pullback has already begun, as ZEC dropped from $169 to $161.5. The RSI has not dipped below the neutral 50 level, which meant that the lower timeframe bullish momentum could continue.

The OBV has also been rising recently, to show steady demand behind the bullish trend. This demand could prevent ZEC from falling beneath $159 over the next few hours. The DMI also showed a strong uptrend on the verge of ending. The ADX (yellow) was above 20 but the +DI (green) could dip below 20, based on the session close.

Conclusion

The trend over the past couple of days could continue to see demand arrive and drive prices higher. Despite the bearish divergence, the demand zone remained intact. A session close beneath $156.6 could shift the bullish bias behind ZEC.

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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