Zcash at risk of breakdown as price tests key trendline amid macro and geopolitical headwinds

<p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;">FUNDAMENTAL OVERVIEW</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;">The idiosyncratic catalysts pushing up Zcash have been exhausted and the cryptocurrency is now at the mercy of macro and geopolitical developments. The focus is mainly on the Middle East situation.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">The US and Iran remain engaged in negotiations over Iran’s recent proposal to reopen the Strait of Hormuz. The disagreement reportedly now centres more on the sequencing of the steps rather than the substance of the proposal.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Iran’s government spokesperson said yesterday that Foreign Minister Araghchi had presented a “US proposal” to the cabinet, although no further details were provided. Traders will therefore continue to closely monitor the headlines for any signs of progress.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Fed’s Williams provided some support to the crypto market recently, saying that he saw no urgency to move again after the September hike and that one additional hike would likely be enough if the economy develops as expected. His comments triggered a dovish repricing, with the odds of an October rate hike falling from 70% to 45%.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">The softer than expected US Core PCE data also pushed October hike expectations lower. However, it is worth keeping in mind that much of the downside surprise was driven by the BEA’s annual methodological update and revisions. The agency changed the way some prices are constructed, and economists had warned beforehand that these changes could materially lower reported core PCE. As a result, the report was not a game changer for the inflation outlook.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Looking ahead, US-Iran developments will likely remain the main focus. A breakthrough in negotiations would be positive for Zcash, as it would trigger a further unwinding of aggressive Fed rate hike expectations. Conversely, a prolonged stalemate or a deterioration in the situation could continue to weigh on risk sentiment and keep a lid on the broader crypto market.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;">ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/ZECUSD/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Zcash</a>is testing the major upward trendline again. We can expect the buyers to step in around the trendline, with a defined risk below it, to position for a rally into the 2,000 level. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 1,031 level next.</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;">ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the 4 hour chart, we might have formed a tight range between the 1,360 support and 1,490 resistance. The market participants will continue to play the range by buying at support and selling at resistance until we get a breakout on either side.</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;">ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p></p><p class="MsoNormal" style="font-family: Aptos, sans-serif; margin: 7px 0; line-height: normal; font-size: 15px;">On the 1 hour chart, we have a downward trendline defining the recent pullback into the major upward trendline. If we get a bounce, the sellers will likely lean on the downward trendline, with a defined risk above it, to keep targeting a break below the major upward trendline. The buyers, on the other hand, will look for a break higher to increase the bullish bets into new highs, targeting a break above the resistance.</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 104%; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow">Today</a>we get the US ISM Manufacturing PMI and the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US NFP report. The focus, though, will remain on US-Iran developments.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p> This article was written by Giuseppe Dellamotta at investinglive.com.