Zcash price bounced back, reaching its highest point since December 13 and 47% above its lowest level this month.
Zcash (ZEC), the biggest player in the privacy industry, jumped to a high of $440, bringing its market capitalization to over $7.3 billion. This rally happened in a high-volume environment, with the 24-hour figure rising to $763 million.
Zcash token has rebounded as most analysts predict that privacy will be one of the top themes to watch in the coming year. It has been mentioned by top forecasts by companies like Grayscale and Coinbase.
This explains why other privacy-oriented tokens like Midnight and Monero are rising. It also explains why the Grayscale Zcash Trust assets are rising and nearing the important point at $200 million.
In addition to the narrative, there is clear evidence that people are increasing their use of the Zcash token. Data shows that the supply of shielded ZEC tokens has surged to a record high.
For starters, Zcash uses two approaches. In the first one, transactions in the network work in the public blockchain, allowing all transactions to be available in the public ledger. On the other hand, its shielded transactions are private, with important details like amount and transaction addresses being private.
Zcash price has also jumped as investors reacted to a recent statement by Raoul Paul, who maintained a bullish outlook for the token. He, however, warned that the ongoing rally could be due to rotation, rather than a sustained structural bullish trend.
Meanwhile, the rebound is happening as crypto investors buy the recent dip in Zcash and other altcoins. Bitcoin (BTC) price has jumped to $88,500, while the market capitalization of all tokens soared to nearly $3 trillion.
The daily timeframe chart shows that the Zcash price bottomed at $300 earlier this month as the crypto market crash accelerated.
It has now rebounded to $448 and is nearing the 38.2% Fibonacci Retracement level at $472. It has also remained above the 50-day and 100-day Exponential Moving Averages
Therefore, the most likely scenario is where it continues rising as bulls target the next psychological level at $500 as investors buy the dip.
However, there is also a risk of a pullback as it is slowly forming a bearish pennant pattern, which is made up of a vertical line and a symmetrical triangle pattern. It is also in the markup phase of the Wyckoff Theory, meaning that a retreat is possible.
