Is Zcash price at risk of falling below $1,000?

Zcash price has fallen 12.5% over the past 24 hours to around $1,087 on Friday, putting the $1,000 level back in focus after ZEC retreated from this week's record high near $1,300.

CoinGecko data put ZEC at $1,087.24 at the time of writing, after the privacy coin fell as low as roughly $1,056 during the session. 

The token remained up 15.1% over the past seven days and 125.7% over the past month despite the latest sell-off.

The decline has come as rising oil prices and US Treasury yields have pressured risk assets. 

Brent crude climbed towards $110 a barrel on Friday as the conflict in the Middle East raised concerns over energy supplies, while the US 10-year Treasury yield rose to 4.965%. 

Markets priced a 71.3% probability of a 25-basis-point Federal Reserve rate hike at its meeting ending Sept. 16, according to CME FedWatch data.

Bitcoin fell 0.8% to around $76,624 during Asian trading, while Ether recorded a similar decline near $2,443. 

The US dollar held close to its highest level in a week as higher yields and demand for the currency weighed on risk assets.

ZEC entered the sell-off after a much steeper run than the main cryptocurrencies. 

The token had gained roughly 170% over the previous month before reaching around $1,298 on Sept. 9, leaving traders who entered during the run with substantial unrealised profits.

Selling had already started after ZEC failed to hold its move into the $1,250 to $1,300 region. 

The token closed near $1,239 on Sept. 10 before the decline accelerated on Friday, with the 24-hour chart showing repeated drops through $1,200, $1,150 and $1,100.

Demand surrounding Grayscale's Zcash ETF had contributed to the preceding rally. 

The fund crossed $500 million in assets within two weeks of its Aug. 25 listing and accumulated more than 550,000 ZEC, equivalent to roughly 3% of the 16.9 million tokens in circulation.

A Sept. 8 filing with the US Securities and Exchange Commission disclosed that DCG International Investments acquired roughly $100 million of ZCSH shares in exchange for 85,705.33 ZEC.

The combination of a rapid price increase and reduced available supply helped ZEC climb towards $1,300, but Friday's reversal has pushed the token towards the $1,000 region where leveraged long positions face increasing pressure. 

Forced liquidations below nearby support could accelerate the decline if ZEC fails to stabilise above four figures.

ZEC price analysis

ZEC's daily chart still retains a bullish longer-term structure despite the 12.5% daily decline. 

Price is trading near $1,086 and remains above the 20, 50, 100 and 200-day exponential moving averages at $961.57, $773.10, $645.28 and $530.62.

The distance between price and the 20-day EMA has narrowed quickly following the rejection from around $1,300.

ZEC is now approaching the rising trend line that has supported the latest leg of its rally, with the line converging towards the $1,000 area.

See below:

ZEC/USDT 1-day price chart. Source: TradingView.

A fall below $1,050 would leave the psychological $1,000 level as the next support, followed by the 20-day EMA near $962.

A daily close below the 20-day EMA would leave considerably less visible dynamic support before the 50-day EMA at $773.10. 

ZEC last traded below its 20-day EMA in August, before the steepest part of the rally began.

The daily Commodity Channel Index has fallen to 64.02 after surging above 400 during the rally. Its signal line stands at 120.95. 

The sharp retreat in CCI shows that the extreme positive momentum behind the move towards $1,300 has unwound, although the indicator itself remains above zero.

A recovery above $1,150 would put the first resistance around $1,200. ZEC would then need to clear $1,250 before another attempt at the $1,294 to $1,300 region becomes possible.

Shorter-term readings remain bearish. On the 4-hour chart, the Parabolic SAR is positioned above ZEC at $1,255.27 after price dropped from the recent high.

ZEC/USDT 4-hour price chart. Source: TradingView.

SAR dots above price indicate that the 4-hour trend remains under selling pressure, with the indicator currently sitting close to the previous $1,250 resistance zone.

The 4-hour Money Flow Index has dropped to 36.29 from readings above 60 earlier in the week. 

The fall shows that buying pressure has weakened substantially during the correction, but the MFI has not yet entered its conventional oversold region below 20.

ZEC has bounced from around $1,055 towards $1,087, leaving $1,050 as the immediate support. 

Below it, the rising daily trend line and $1,000 form the next support area. A decisive break below both would expose the 20-day EMA near $962.

For the downside move to lose momentum, ZEC would first need to recover the $1,120 to $1,150 region. 

A move above $1,150 could open a retest of $1,200, while the 4-hour Parabolic SAR near $1,255 currently forms a higher technical barrier before the $1,294 to $1,300 resistance zone.