Zcash (ZEC) unexpectedly surged today, recording over a 10% increase in just 24 hours, making this cryptocurrency the center of the market.
Notably, the strong breakout helped ZEC escape its previous downtrend, resetting the technical structure in a more positive direction. The upward momentum was triggered right after the price bounced from an important demand area, coinciding with the Fibonacci retracement level – a factor that further reinforces confidence in the uptrend.
At the moment, the technical outlook for ZEC is assessed as bright. If on-chain signals continue to align, the key resistance area around the 57 USD mark is likely to be tested soon.
Are institutions returning to the ZEC ecosystem?
The open interest (OI) of ZEC has surged to its highest level since early July, indicating a clear return of institutions and large investors.
Historically, an increase in OI alongside rising prices usually reflects new money flowing into the market, rather than just the closing of short positions. This is a crucial factor that could support ZEC's growth trend in the near future.
The liquidity cluster ahead
In-depth analysis from Bitcoin Magazine, based on on-chain liquidity data from Coinglass, shows that just above the current price area exists a dense cluster of sell orders – a factor that could hinder the bulls' progress.
To maintain momentum, ZEC needs sufficient demand to absorb this supply, thereby avoiding the risk of the upward trend stalling. If institutions are indeed leading the bullish wave, the aforementioned resistance area is likely to be tested sooner than expected.
Currently, ZEC is blending into the overall market recovery. The combination of high open interest (OI) and positive changes in the technical structure is providing the bulls with reasons to maintain their confidence.
The question now is: will this impressive recovery be enough to turn into a sustainable uptrend, or will it face obstacles from the 'liquidity pockets' that are still waiting at higher price levels?