Zcash (ZEC), the Swiss Bank Account of Cryptos, Spikes to Six-Month High
The privacy-focused Zcash (ZEC) extended its bullish breakout on Thursday, as a combination of market momentum and positive news headlines helped the lagging cryptocurrency surge to new yearly highs.
ZEC: $100 in the Cards
For the first time since November, Zcash is making a big push toward the psychological $100 level and a breakout appears highly likely in the near term. The cryptocurrency peaked at $99.68 on Poloniex, marking a new high for 2019. ZEC last traded at these heights in mid-November prior to the bitcoin cash-induced selloff.
At press time, the ZEC/USD exchange rate was valued at $93.79, where it was up 9.8% during the session.
Zcash is in the midst of a bullish breakout that began just over two weeks ago after the price overcame the 200-day moving average. The latest rally puts ZEC into overbought territory, according to the daily relative strength index (RSI). A textbook pullback is expected under such conditions.
The accumulation/distribution (A/D) line, a volume-based indicator that measures supply and demand, suggests that traders are beginning to hold ZEC following the latest breakout. The A/D line has been in perpetual decline for the better part of a year, underscoring weak demand for ZEC. There’s evidence that this trend is finally reversing.
What’s Driving ZEC?
Zcash appears to be playing catch-up with the broader market following a dismal first quarter. Between January and March, the ZEC price was virtually unchanged. Since April 1, prices have rocketed 52% higher.
The return of altcoin season is helping Zcash shake off some of the bearish sentiment that had prevented previous rally attempts. So far, the bearish-to-bullish trend reversal has discounted the role of privacy coins in fueling offshore deposits and digital wealth creation. Interestingly, Zcash is taking off at precisely the same time as Monero (XMR), another leading privacy coin.
Zcash may have also been helped by revelations that Ethereum co-founder Vitalik Buterin holds a large chunk of the privacy-focused coin. Buterin recently disclosed that he held roughly 1,000 ZEC at last check.
Yep! Around 1k of them last time I checked.
— Vitalik Non-giver of Ether (@VitalikButerin) May 24, 2019
On April 6, Hacked made a strong case for Zcash being a good long-term investment option. Superior privacy guarantees offered by zero-knowledge cryptography, combined with growing demand for offshore store-of-value investments, make Zcash an attractive option for investors betting on a privacy-centric future.
Zcash is one of just nine single-asset investment products offered by Grayscale, which runs the biggest bitcoin investment trust in the world. Last year, Grayscale researcher Matthew Beck argued that Zcash could reach jaw-dropping valuations in the next half decade as investors seek out an alternative store of value to safeguard against global volatility.
Zcash is essentially a “Swiss bank account in your pocket,” Beck argues, which allows investors to hedge against inflation, political uncertainty and rampant quantitative easing.
But in order for Zcash to reach the level Beck says is possible, it needs to account for a large chunk of offshore wealth (around 10% to be more precise). If that happens, a five-figure Zcash is possible in the distant future. Read more: Is Zcash the Swiss Bank Account of Cryptos?
Disclaimer; The author owns Bitcoin, Zcash and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via TradingView.