Zcash (ZEC) is still bullish in larger time frames amid pullback warning signs, whereas the analysts are citing bearish divergence and support retracement possibilities. Increased derivatives participation shows high market engagement levels with the launch of the Zcash ETP product by 21Shares on the European exchange platform.
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ZEC Price Faces Pullback Risk After Sharp Rally
The bullish nature of the Zcash (ZEC) coin continues on the daily chart level, even though signals about an imminent pullback start appearing.
According to crypto analyst Jesse Oslen, despite the overall positive trend, it might be the time for another purchase, as the price will most likely test some crucial dynamic support.
Source: Jesse Oslen’s X Post
According to Oslen’s chart analysis, ZEC is showing a combination of bearish divergence and a reversal candle that could signal weakening short-term momentum.
Such a setup may lead to a retest of the trending support dots or potentially lower levels. However, the analyst emphasized that higher time frames continue to maintain their bullish structure despite the developing pullback signals.
ZEC Breakout Extends Above Major Moving Averages
TradingView data shows that ZEC staged a powerful daily breakout after spending the summer consolidating between approximately $390 and $530.
The cryptocurrency accelerated sharply in late August, moving well above its short- and long-term moving averages before reaching $1,635.01. The token gained 11.16% during the latest session.
Source: TradingView
The 20 EMA currently provides an important dynamic reference point near $1,262.71. While the large distance between the current price and this moving average highlights the strength of the rally, it also leaves room for a deeper retracement if momentum cools. Traders may therefore monitor this area closely if selling pressure increases across the market.
Also Read: ZEC Price Eyes Further Gains as NU7 Vote and Derivatives Boost Activity
Technical Indicators Confirm Strong Buying Pressure
The structure of the daily moving averages in ZEC continues to indicate solid bull strength in the market. The 20 EMA is still well above the 50, 100, and 200 EMAs, resulting in a positive structure in the important trend indicators. The trend is thus still bullish despite some technical exhaustion in the shorter term.
The MACD indicator also supports the broader bullish setup. The MACD line stands near $189.87 compared with a signal line around $164.28, while the histogram remains positive and continues expanding.
This configuration indicates that buying momentum remains strong, although the bearish divergence highlighted by Oslen could signal that momentum is beginning to moderate.
Derivatives Activity Signals Rising Participation
The ZEC derivatives market is also witnessing higher levels of trading activity as per data by Coinglass. This is evidenced by the 9.74% increase in trading volume to $7.66 billion and a 14.67% increase in open interest to $3.27 billion.
It is noteworthy that both the indicators are increasing together, implying more people getting involved in the market.
Source: Coinglass
Growing open interest along with increasing volume of derivatives trading will cause greater volatility since more money will be invested in leveraged markets.
While it is difficult to conclude from the information provided about traders’ outlook, whether it is bullish or bearish, it can be seen for sure that there is growing activity in relation to ZEC.
21Shares Launches Zcash ETP in Europe
In addition to this positive market structure, the bullish trend is further driven by the fact that through the listing of Zcash ETP, which trades under the ticker symbol ZCASH, 21Shares has brought regulated investment options for Zcash into Europe.
This physically backed ETF provides European traders with the ability to trade ZEC without using wallets and seed phrases.
Source: 21Shares’ X Post
Zcash integrates the monetary system of Bitcoin with the added feature of privacy using shielded transactions in a cryptographic sense.
In addition, the ETP can provide an alternative route for exposure as derivative participation increases while the momentum on a higher timeframe basis remains bullish. However, ZEC is open to a potential pullback that may come soon.
What Comes Next for the ZEC price?
The 20 EMA at $1,262.71 is important if ZEC pulls back. Maintaining that level can help in seeing a resumption of the buying momentum and retaining the bullish setup.
The breakdown would increase the losses. However, increased derivatives trading, the presence of European ETPs, and the bearish divergence signal by Oslen make the situation even more interesting.
Also Read: ZEC Price Eyes $1,800 as Momentum Builds and Social Activity Surges
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
