Zcash is now trying to recover the losses accumulated in November after a sharp decline that halved its value.
The latest increase of 40% has brought more optimism to the market, but several factors indicate that ZEC may still struggle to achieve a real recovery.
Zcash does not follow Bitcoin
RSI shows that buyers' interest is strengthening as Zcash begins to gain more attention. The indicator has now crossed the neutral level of 50.0 for the first time in nearly two weeks, signaling increased confidence in the market. If RSI moves into positive territory, it often provides an early signal of trend reversal and can support ZEC's continued rise.
But just the recent increase in RSI is not enough to guarantee a full recovery. The broader market is sensitive to macroeconomic changes, so even small fluctuations in sentiment can affect ZEC's strength. Continued buying pressure is required if this rise is not to disappear quickly.
Zcash is currently correlating with Bitcoin at -0.47, which shows a negative relationship when BTC shows signs of recovery. This difference creates a risk for ZEC. If Bitcoin continues to rise, ZEC may face resistance, as negative correlation often limits the rise when the entire market becomes stronger.
But if Bitcoin loses momentum or falls, the negative correlation may help ZEC continue its rise on its own. Thus, uncertainty arises, as ZEC's future is now dependent on Bitcoin's next major movement.
ZEC is trading at 439 USD right now, just below the important level of 442 USD. The recent increase of 40.5% is clear, but it is not enough to offset the 55% large drop in November.
To achieve a real recovery, Zcash needs to increase nearly 59% in the coming days to reach 700 USD. In the short term, a breakout above 442 USD could pave the way towards 520 USD if the level becomes a support.
If the negative correlation with Bitcoin becomes a hurdle, ZEC could fall back to 403 USD and possibly down to 340 USD. This would remove a large part of the recent rise and eliminate the positive trend.
