Zcash Price Forecast: Hot US CPI data counters Grayscale’s marketing as ZEC probes $1,000 support

• A fifth successive day of losses takes Zcash towards $1,000 on Wednesday.
• Stronger US CPI and increased expectations of Fed rate rises dampen investor appetite for high-risk assets.
• A major Zcash advertising push from Grayscale accompanies the redirection of sponsor fees to network development, marketing, community and education.

Hotter-than-expected monthly US inflation figures have outweighed Grayscale’s Zcash marketing campaign and its contribution of sponsor fees to the network. After five days of heavy selling and cumulative losses of over 20%, Zcash (ZEC) is trading close to $1,000 on Wednesday.

With downward momentum gathering pace, Zcash’s technical outlook remains bearish, putting a key moving average near $880 in focus.

US inflation puts pressure on the crypto market

October’s US Consumer Price Index (CPI) rose 0.4%, Tuesday’s release showed, exceeding market forecasts of 0.3%. Following September’s 0.6% increase, the reading heightened inflation worries and increased the likelihood of a US interest rate rise.

A 90% probability of a 25 basis point (bps) Fed rate rise at the 9 December meeting is indicated by the CME FedWatch Tool, pointing to reduced liquidity in high-risk assets. The crypto market has suffered sharply: as previously reported by FXStreet, liquidations exceeded $700 million over the last 24 hours, with nearly $580 million in long positions accounting for the bulk of the total.

Tuesday brought a 10% decline in Zcash, leaving it vulnerable to further losses below $1,000, while Bitcoin (BTC) dropped beneath $74,000. ZEC’s fall outweighed any potential benefit from Grayscale’s marketing campaign on the front page of the Wall Street Journal and its allocation of sponsor fees to Zcash’s network development, marketing, community and education.

Nevertheless, the pullback suggests markets are factoring in the prospect of a 25 bps rate rise. Once that happens, crypto prices could find stability and potentially recover.

Zcash derivatives turn bearish

On Wednesday, CoinMarketCap’s Fear and Greed Index falls to 26 from 42 last week, signalling a sustained weakening in risk appetite. Investor fears are peaking and crypto derivatives show a clear selling bias, following the Democratic Party’s victory in last week’s US midterm elections and, now, mounting inflation concerns.

At 0.95 on Wednesday, Zcash’s futures taker buy-to-sell ratio has slipped below 1, according to CoinGlass. The reading suggests new market orders are immediately consuming resting bids. As the wider crypto market retreats, this reduction in buy-side liquidity points to downward pressure and possible panic selling.

Technical outlook: Zcash faces a break below $1,000

A 3% fall at the time of writing on Wednesday extends Zcash’s steep five-day decline. The privacy coin’s correction has taken it below the 50-day Exponential Moving Average (EMA) at $1,202, bringing the longer-term 200-day EMA at $880 closer.

Tuesday’s 10% decline confirmed a bearish break from the consolidation range bounded by the 8 October high of $1,340 and low of $1,112. The closing price also fell through horizontal support at $1,050, a level that had supported Zcash’s rebound on 18 October, opening the way towards the 200-day EMA at $880.

Daily-chart indicators favour further weakness. The Moving Average Convergence Divergence (MACD) is falling below zero as its negative histogram expands, while sustained downward pressure has pushed the Relative Strength Index (RSI) down to 36.

To relieve the immediate bearish pressure, Zcash needs to recover the former support levels near $1,050 and $1,112, which now act as resistance. Regaining them would clear a route back towards the 50-day EMA at $1,202.

(The technical analysis of this story was written with the help of an AI tool. Know more.)