Crypto market displaying something not seen since 2017
Rallies have typically been sold off on even fast time frames in the cryptocurrency markets, a trend that has existed for over two years. Some evidence suggests changes in this trend.
A common shout out you here across the cryptocurrency sphere is something we haven’t heard or seen in over two years: BTD – Buy The Dip. BTD means to buy, at a discount, an instrument that you believe is strong and will continue to gain value. BTD is a common phrase in the stock market – a phrase that has existed now for over a decade and good reason. Buying the dip is something that has seemed almost like a memory for many cryptocurrency traders, especially those involved in the altcoin market. Bitcoin may be the single anomaly in the entire cryptocurrency sphere. For over two years, 95% of the altcoin market has been in a bear market. Occasional rallies have occurred, but all have been sold off. There have been very few exceptions to this behavior. That is, until this week.
The chart above is Zcash’s (ZEC) 4-hour chart. Zcash has been one of the big leaders of the most recent rally and the clear leader in the privacy coin sector. But Zcash has also been a leader in its ability to create new all-time lows on a consistent basis – Zcash made new all-time lows as recently as January 3rd, 2020. Few altcoins have had such a consistent and powerful move lower than Zcash. So it is a surprise to see it performing so strongly. And this isn’t just a dead-cat bounce – clear buying and support are occurring on Zcash.
Some of the important price zones have been highlighted with green boxes. The three highlighted areas represent patterns that have historically resulted in Zcash selling off and dropping lower. Instead, what we’re witnessing is strong attempts to short, but a significant amount of buyers stepping in to support Zcash. Today’s (January 16th, 2020) price action is extremely important to analyze because on a daily chart; we are witnessing strong support keeping Zcash near its recent highs. On the 1-hour charts and 15-minute charts, Zcash is displaying textbook examples of bullish continuation. Multiple series of bull flags and bullish pennants have developed over the past seven trading days.
I believe today is going to be the most important day for Zcash and the broader cryptocurrency market. A lower close today should be expected – Zcash has moved up as much as +120% since January 1st, 2020 and is currently up +82.7%. During Thursday trading, Zcash is has been moving higher since its daily lows and looks to continue this pattern until the close. If Zcash closes the current daily candle, it will have formed an inside bar, which would indicate consolidation and then the eventual formation of a bullish pennant or bull flag on the daily chart. In other words, we could be witnessing the formation of Zcash’s first bullish continuation pattern on a daily chart in over two years.