After a steep 50% crash from its peak in mid-November, the privacy-focused cryptocurrency ZCash (ZEC) is showing signs of life with an approximate 9% gain in the last 24 hours. The price has climbed back to the $364 level, but market experts are divided on whether this is a sustainable recovery or merely a temporary “dead cat bounce.”

Adding to the uncertainty, the recent price increase has been accompanied by a 10% drop in daily trading volumes to $1.4 billion. This decline in trading activity suggests a potential weakness in the bullish momentum, raising questions about the rally’s strength.

Sellers Dominate at Key Resistance

Crypto analyst Ardi pointed to significant whale activity, noting that large holders have been attempting to push the price higher. However, he highlighted a major hurdle at the $380 resistance level, where selling pressure is intense. According to his analysis, the sell volume in this zone reached 18.7 million, nearly triple the recorded buy volume of 6.1 million.

This imbalance suggests that sellers are using the available liquidity to offload their positions. Ardi warned that if ZEC fails to reclaim the $380 mark, the current buying pressure from whales could simply become exit liquidity for bearish traders. He projects that a rejection at this level could send the ZCash price down toward the $250 to $290 range. Conversely, if buyers overcome this resistance, it could trigger a short squeeze and push the price directly to $420.

A Potential Swing Trade Opportunity

In contrast, analyst Altcoin Sherpa sees a potential opportunity for a swing trade. He noted that the ZEC price has retraced to the 0.618 Fibonacci level, a technical indicator often viewed as a strong support zone. While he believes a return to its all-time high is unlikely in the near term, he suggests this setup could offer a 20% to 40% upside on a rebound.

Sherpa advised that traders considering this opportunity should place a stop-loss below the 0.618 Fibonacci level to manage potential downside risk. This more optimistic outlook banks on technical support holding firm against the heavy selling pressure observed by other analysts.

During its rally in November, ZCash attracted notable institutional interest, with firms like the Nasdaq-listed Reliance Global and the Winklevoss-backed Cypherpunk Technologies announcing plans to add ZEC to their treasuries.

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