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Since its recovery from the $197 support zone, Zcash has been stuck in a narrow range. The altcoin traded between $200 and $230, reflecting that the market is still searching for direction.
This consolidation continued on the daily chart, with the price briefly climbing to a local high near $229 before pulling back.
At press time, Zcash (ZEC) It traded at $226 with an increase of 9.26% in the last 24 hours. During this move, ZEC reversed its short-term Exponential Moving Average (EMA20), indicating increasing upward momentum.
Zcash depends on speculative demand
Despite the range-bound structure, Derivative investors showed an increasingly bullish positioning.
On March 15, Zcash recorded $160.8 million in Futures Inflows, compared to $144.4 million in the 12-hour time frame.
As a result, Futures Net Flows increased 544% to $16.5 million during the same period.
On top of this, 24-hour Netflows rose 14% to $12 million, underlining continued participation in derivatives. Such entries indicated that traders were actively opening positions as market participants took positions against volatility.
This activity was also seen in Open Interest, which increased by 10.49% to $371 million.
Open Interest increasing with capital inflows generally indicates stronger demand for futures positions.
Meanwhile, the Long/Short Ratio increased to 1.23. 55.4% of long positions and 44.8% of short positions were formed. A ratio above 1 indicated that most traders expected further upside.
Momentum indicators point to the rise
With capital flows into the derivatives market, ZEC showed strengthening upward momentum. Looking at the Relative Strength Index (RSI), it is seen that the indicator increased from 42 to 47, indicating that purchasing pressure is increasing.
However, with the RSI still below 50, buyers have not yet taken control of the market. Similarly, ZEC broke the EMA20 to $224, further confirming this bullish momentum.
These indicators flashing in an upward direction indicate that the potential trend will continue if sustained. Hence, if the demand continues and the RSI shows an uptrend, ZEC will turn $230 and target the $250 resistance.
However, if demand turns into short-term speculation, ZEC will drop to $205.
Whales are pulling the market back
Whales continue to pull the market back as other market participants show determination to get ZEC out of trouble.
Spot Average Order Size data showed whales accumulating orders below $220. The increase in large orders between $197 and $212 was associated with higher whale participation at these levels.
But these whales mostly sell orders. Looking at Spot Taker CVD, it appears that sellers have dominated the market over the last 30 days.
Every time Zcash attempts a breakout, whales step in and cash out, pushing the market even further. Continuity of this whale behavior creates significant downward pressure and could lead to prolonged weakness for ZEC.
Therefore, ZEC needs a shift in whale sentiment for a sustainable upward move. By then, Zcash is likely to see more weakness and sideways movement is likely.
Final Summary
- Zcash (ZEC) traded in a tight range of $200-230 after recovering from the $197 support zone.
- Derivatives activity increased and futures net flows rose 544% to $16.5 million as investors opened new positions.
