Zcash Likely Bound for Brief Correction After 80% Gains

Key Takeaways

  • Zcash has risen by greater than 80% over the past 5 days to hit $265, its highest worth since May.
  • The bullish impulse was probably fueled by information that the community will transition to proof-of-stake.
  • ZEC might now be sure for a spike in profit-taking earlier than the uptrend resumes.

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Zcash made headlines final week after builders introduced the community would transfer from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. Although the transition could take as much as three years to finish, ZEC has gained important bullish momentum within the wake of the announcement. 

Zcash Is Back within the Green

Zcash is hovering after the event firm behind it, Electric Coin Company (ECC), revealed plans to transition to a PoS consensus algorithm. 

In a latest blog post, ECC’s CEO Zooko Wilcox made the case in favor of switching the community to PoS. He highlighted the necessity to lower the downward worth stress on ZEC from miners and enhance the utility of the token. Wilcox argued that PoS would make Zcash “extra decentralized, attack- and capture-resistant and egalitarian,” strengthen safety, and enhance efficiency. 

The transition to PoS could possibly be “achievable inside three years,” based on ECC. Still, cryptocurrency fans seem to have welcomed the information. Zcash has seen its market worth surge by greater than 80% because the announcement on Nov. 19, going from $146 on Nov. 18 to a latest excessive of $265 today

The privacy-coin could possibly be sure for a quick correction earlier than advancing additional. The Tom DeMark (TD) Sequential indicator offered a promote sign on ZEC’s 4-hour chart as costs failed to beat resistance. A spike in promoting stress across the present worth ranges might assist validate the bearish formation, leading to a retracement to the $227 help earlier than the uptrend resumes. 

Zcash/US greenback worth chart (Source: TradingView)

Given the rising optimism round Zcash, it will be prudent to be careful for a decisive 4-hour candlestick shut above $262. Breaching such a vital resistance space can increase buyers’ confidence and lengthen the uptrend in the direction of larger highs. ZEC might then surge in the direction of $304 and even retest mid-May’s excessive of $373. 

Disclosure: At the time of writing, the creator of this characteristic owned BTC and ETH.

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