ZEC flashed a bearish signal that has previously been a precursor to a 64% price drop.
ZEC has undoubtedly become crypto’s rock star lately, with its price skyrocketing to a ten-year high above $1,200.
However, certain worrying signals suggest that a short-term pullback may abruptly replace the rally.
Are the Bears Coming?
Earlier this month, ZEC surpassed $1,200 for the first time since 2016 and reached almost $1,300. Currently, it trades around $1,220 (per CoinGecko), representing a 150% monthly increase and a staggering 2,450% explosion on a yearly scale. The main drivers behind the spectacular surge include the launch of Grayscale’s ZEC ETF, along with other factors, which you can explore in our detailed article here.
Nonetheless, three key developments suggest the asset’s relentless climb may be coming to an end. The first one is the TD Sequential indicator, which, according to analyst Ali Martinez, has flashed a sell signal on the 3-day chart.
“The last time this setup appeared, on May 19, it resulted in a 64% price correction. Worth paying attention to this one,” he said.
The second is ZEC’s Relative Strength Index (RSI), which has surged past 70. This indicates that the token has entered overbought territory and could be gearing up for a pullback. Conversely, ratios under 30 are typically considered bullish.
Last but not least, investors have been shifting from self-custody to crypto exchanges. This development is interpreted as bearish because it increases immediate selling pressure.
$10K on the Way?
Despite the worrying signals mentioned above, many market observers believe ZEC still has plenty of fuel left to post further gains. X user Altcoin Sherpa described the $1,000 and $1,100 levels as “interesting,” adding they would rather see price spend time in a specific region and “base out” than check the exact price for the bottom.
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“I still think this is a fantastic one to buy though for this cycle,” the analyst concluded.
Crypto With Harris ₿ argued that as long as the price stays above $1,050, “there is no need to worry.” In his view, the masses buying now out of FOMO could trigger a major pump to a new all-time high of $10,000, and he predicts ZEC could reach that milestone before Ethereum (ETH).