Crypto: Zcash goes back above $1,000 for the first time since 2018

In about ten years, the ZEC has just crossed $1,000 for the first time. This crypto briefly exceeded $1,045 this Friday, September 4, after a monthly increase close to 100%. Such a rally was supported by the launch of Grayscale’s Zcash ETF, demand for confidential trades and liquidations of short positions. However, the evolution of leverage and the high level of the RSI now amplify the risk of a sharp decline.

ETF and short squeeze propel Zcash above $1,000

According to market data, ZEC jumped 20% in 24 hours before reaching a high between $1,023 and $1,045. The crypto’s valuation approached $17 billion, while its trading volume went beyond $1.2 billion.

This development also allowed the token to surpass its January 2018 peak. However, it does not represent an absolute record. The prices close to $30,000 observed during the launch of Zcash in 2016 were based on a very low circulating supply and remain difficult to compare with the current market.

Various statistics allow us to measure the extent of this progression:

• The ZEC has increased by almost 94% in thirty days;
• Its annual performance exceeds 2,300%;
• Nearly $34.5 million in short positions were liquidated;
• Open interest rose from $1.6 billion to nearly $2.4 billion;
• The area between $985 and $1005 becomes the first support to watch.

The movement was greatly intensified by the liquidations. The Rain account indicated on the social network X:

Liquidations of short positions can accelerate the rise, as traders must repurchase their ZECs.

Grayscale makes it easier to access Zcash from brokerage accounts

At the end of August, Grayscale launched the first US ETF for Zcash. Listed on the NYSE Arca under the symbol ZCSH, the product comes from the mutation of the previous Zcash Trust. The latter allows investors to gain exposure to the ZEC price through a traditional brokerage account.

THE Grayscale funds owned more than 400,000 ZEC and its assets exceeded $400 million at the beginning of September. Its arrival has expanded the base of potential investors, although the growth of its assets also depends directly on the increase in the ZEC price.

The bullish narrative was also reinforced by the technical improvement of the network. Moreover, Zakura developers have published new cryptographic tools capable of reducing the creation of a private transaction from three seconds to less than 200 milliseconds in certain cases.

Sean Bowe, co-founder of Zcash, underlines : “protected wallets that use Zakura Common, as well as full nodes like Zakura, all benefit”.

$1100 becomes next technical target

The short-term trend remains favorable as long as the ZEC manages to maintain the zone between 985 and 1005 dollars. This level is equivalent to both the psychological threshold of $1000 and the 20-period exponential moving average on the hourly chart.

A confirmed crossing of the resistance located between 1045 and 1055 dollars would allow the price to target 1100 dollars. Another technical analysis then positions a possible extension around 1322 dollars, however this scenario imposes sufficient cash demand to absorb profit taking.

Conversely, a break above $985 could expose the area between $935 and $955. A drop towards $900 could further weaken the structure, while a move below $850 would bring the ZEC back to the starting point of its last increase.

Leverage threatens rally strength

It is important to note that the main danger does not yet come from the overall trend, but from the accumulation of leveraged positions. Open interest now constitutes nearly 14% of the ZEC valuation. Such a proportion accentuates the sensitivity of the price to chain liquidations.

The daily RSI is also approaching 80, a level usually associated with an overbought situation. As for that of the four-hour chart, it is around 70. These statistics do not immediately announce the end of the rally, but they reflect a market already under pressure.

If the ZEC manages to maintain the 1000 dollars, this could make it possible to build a new base. Their rupture, combined with overly positive financing rates, would on the contrary trigger a rapid correction towards 950, or even 900 dollars.