This is a daily technical analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Prices for privacy-protecting digital currency Zcash (ZEC) have moved past a key resistance or supply zone, hinting at bigger gains ahead.
Since February, ZEC has traded sideways, with sellers dominating above $40. Meanwhile, dips near $25 have consistently found support, keeping the price within a narrow range.
On Sunday, buyers finally managed to chew through the long-held supply zone of $40-$43, hitting a high of $45.80 on crypto exchange HTX, the level last seen on Jan. 26, according to data source TradingView.
The so-called range breakout is like a spring uncoiling bullishly after building up demand during consolidation. This release of stored energy often results in a sharp, rapid move higher.
Technical analysis theory suggests adding the range width, or the spread between the upper and lower range boundaries, to the breakout point. In ZEC’s case, the measured move method points to a rally toward $60.
Price moves through long-held resistance levels, as in ZEC’s case, often draws bids from breakout traders. These entities seek to enter positions when the price of an asset moves beyond a defined support or resistance level, aiming to capitalize on a continued move higher or lower.
ZEC’s peer, monero (XMR), recently broke out of a bigger and more prolonged range play with a bullish golden cross, surging to highs above $300. Readers should note that chart patterns do not always work as intended.
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