Zcash peaks on Europe's first ETP, then retreats on oil, rate fears

FUNDAMENTAL OVERVIEW

The cryptocurrency pushed on to fresh peaks this week following the launch of the first European ETP for Zcash by asset manager 21shares. In addition, Grayscale's Zcash fund (ZCSH) is set for a 3-for-1 share split on September 28, and trading on a split-adjusted basis will begin on September 30. Such a move could broaden access and spur retail participation, offering Zcash further support.

From a macro perspective, the steep fall in crude oil, driven by expectations of lessening tensions and a sooner resolution to the conflict, has provided support to risk assets of late. However, at the UN General Assembly, Trump dampened such hopes by reiterating that a US agreement with Iran would follow the November elections.

Risk appetite turned sour thereafter, pulling cryptocurrency prices down. The negative pressure then intensified yesterday after US Flash PMIs came in well above forecasts, producing a fresh hawkish repricing that lifted Treasury yields to new highs.

Attention is likely to stay on rate expectations and Middle East events. Should the easing of tensions persist and markets begin to anticipate a quicker cessation of hostilities, oil prices are liable to slip again, potentially buoying risk assets including digital currencies. On the flip side, a failure in US-Iran negotiations and a fresh escalation could have crude resume recovering its recent declines, damping risk appetite and ultimately dragging Zcash down.

ZCASH TECHNICAL ANALYSIS – DAILY TIMEFRAME

The daily chart shows Zcash hitting a new peak this week thanks to the bullish impetus from the launch of Europe's first ETP. Should a pullback occur toward the major trendline, buyers are likely to defend it, using a stop below to position for further record highs. Sellers, conversely, are watching for a break lower to add position for a decline to the 1,027 mark.

ZCASH TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the four-hour chart, support sits around 1,440. Should the price reach that area, buyers are anticipated to intervene, with a stop beneath the zone, aiming for a push to new highs. Sellers, by contrast, seek a break to add to short positions, targeting a fall toward the major trendline near 1,300.

ZCASH TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

The one-hour chart offers little additional insight: from a risk-reward standpoint, buyers have a more favorable setup at the 1,440 support, while sellers await a break to prolong the decline toward the major trendline.

UPCOMING CATALYSTS

Today on the calendar are the Trump-Xi encounter and the US jobless claims figures.