$1,000 Support Test: Zcash (ZEC) Price Forecast as Hot US CPI Data Counters Grayscale’s Marketing

• $1,000 approaches for Zcash on Wednesday as losses extend into a fifth straight day.
• High-risk assets lose appeal among investors as hot US CPI increases expectations of Fed rate hikes.
• A major Zcash advertising push from Grayscale accompanies the redirection of sponsor fees to network development, marketing, community and education.

$1,000 is within reach as Zcash (ZEC) falls on Wednesday. Heavy selling over the past five days has pushed cumulative losses above 20%. Stronger-than-forecast monthly US inflation has outweighed Grayscale’s Zcash marketing initiative and its contribution of sponsor fees to the network.

With downward momentum strengthening, Zcash’s technical outlook remains bearish. A key moving average near $880 is now in focus.

0.4% US inflation rise pressures crypto

October’s US Consumer Price Index (CPI) rose 0.4%, Tuesday’s release showed, exceeding the market forecast of 0.3%. Coming after September’s 0.6% increase, the reading heightened inflation concerns and expectations of a US rate hike.

A 90% probability of a 25 basis points (bps) Fed rate increase at the December 9 meeting is indicated by the CME FedWatch Tool, reducing liquidity available to high-risk assets. Crypto markets have suffered sharply. As previously reported by FXStreet, liquidations exceeded $700 million over the last 24 hours, with long positions accounting for nearly $580 million.

A 10% Tuesday decline left Zcash exposed to further losses below $1,000, while Bitcoin (BTC) dropped beneath $74,000. ZEC’s retreat outweighed the potential upside from Grayscale’s front-page marketing campaign in the Wall Street Journal and its allocation of sponsor fees to Zcash network development, marketing, community and education.

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

0.95 taker ratio signals bearish Zcash derivatives sentiment

Heightened investor fears have left crypto derivatives trading firmly skewed towards selling. On Wednesday, CoinMarketCap’s Fear and Greed Index fell to 26 from 42 last week. The decline points to steadily weakening risk appetite following the Democratic Party’s victory in last week’s US midterm elections and, more recently, mounting inflation concerns.

Zcash’s futures taker buy-to-sell ratio fell below 1 to 0.95 on Wednesday, according to CoinGlass. The reading suggests incoming market orders are immediately consuming resting bids. Diminishing buy-side liquidity points to downward pressure and suggests panic selling alongside the broader crypto market’s decline.

$1,000 at risk: Zcash technical outlook

At the time of writing on Wednesday, Zcash has lost 3%, extending its sharp slide over the past five days. The privacy coin’s correction has taken it below the 50-day Exponential Moving Average (EMA) at $1,202 and closer to the longer-term 200-day EMA at $880.

Tuesday’s 10% decline technically confirmed a bearish break from the consolidation range bounded by the October 8 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 October 18 rebound. That breach opened the way towards the 200-day EMA at $880.

Daily-chart momentum favours further downside. The Moving Average Convergence Divergence (MACD) is moving below zero while its negative histogram expands. Persistent selling pressure has also driven 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 those levels would reopen the route 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.)