Zcash (ZEC) dropped by more than 20% on November 18 as the broader crypto market continued bleeding. The drop saw more long traders being liquidated as a bearish double top pattern also emerged, creating concerns of a drop to levels last seen in October. At press time, ZEC price trades at $558 with $2 billion in trading volumes per CoinGecko data.
ZEC Price Analysis as Double Top Signals 36% Crash
ZEC has confirmed a double top pattern on the daily timeframe. This pattern usually precedes a downturn that could wipe out some of the gains that the privacy coin has made over the last two months.
Zcash created its first top earlier this month after the price soared to a multi-year high of $750. After traders started taking profits at this level, it dropped to form strong support at $443 before another brief rally commenced last week. The second top emerged earlier this week, as seen below, creating strong resistance at $699.
For ZEC price to confirm the bearish outlook depicted by the double top, it has to drop below the critical support of $443, which also serves as the neckline. If this happens, it could trigger a 36% crash to $280.
The RSI, which has dropped from 73 to 57, also shows that the bullish momentum has weakened. However, given that the metric is still hovering above 50, buying pressure remains stronger than the selling pressure.
At the same time, the AO bars remain positive and are also lengthening in size, another sign that bulls still have the upper hand. If this bullish outlook holds, the price of ZCash might resume the bullish rally and confirm the bull flag that has been forming over the past week. Such a move could trigger a 36% gain to $952.
Nevertheless, considering the ongoing Bitcoin selloff that has also plagued the broader crypto market, analysts remain skeptical of a recovery in the near term. Analyst ElonTrades notes that the breakdown might cause the ZEC price to hit $450.
63% of Binance Traders Remain Bearish as OI Sheds $300M
On the futures market, ZEC is also leaning bearish, with the majority of traders on exchange giant Binance opening short positions on the privacy coin. Data from Coinglass shows that only 36% of traders on the platform have opened long positions on Zcash.
At the same time, ongoing liquidations have also spoiled ZEC’s volatility, with both shorts and longs being obliterated. However, in the last 24 hours, traders betting on price gains have recorded the most losses with long liquidations totalling $12.74 million against $4.84 million short liquidations.
To sum up, ZEC price is showing weakness, with the 20% drop recorded in the last 24 hours signalling ongoing selling activity. If the drop continues and the price plummets below the critical support level of $443, Zcash might drop to $280. However, if buyers return, the rally might resume, leading to a fresh high at $952.
