Zcash fell about 15% on October 15 and came within a few dollars of $1,000. Then buyers stepped in. ZEC bounced to around $1,250 within a day, and the $1,000 level held without a single 4H close below it. That bounce tells me the range is still alive. So instead of panicking, I’m planning a long.
Here is the setup I’m watching, the levels I’d use, and where my DCA stands.
What Happened to ZEC This Week
The drop had nothing to do with Zcash itself. It was macro. CPI came in hot on Wednesday at 3.7%, PPI followed at 6.3% on Thursday, and Fed hike odds jumped. I covered both prints in my CPI 3.7% post and the PPI 6.3% post. Bitcoin dipped below $80K, nearly $1 billion in positions got liquidated, and the most crowded alt took the biggest hit.
ZEC was that alt. Roughly $20 million in leveraged longs were flushed in one session. On top of that, one whale sold 25,000 ZEC for about $37.8 million, locking in a $27 million profit from a $425 entry. Meanwhile, the daily RSI hit 30, which is oversold territory, and several analysts called the dip a gift. Volume on the flush was the highest of the month, and that usually marks a local low rather than the start of something worse.
The 4H Setup I’m Watching
Let me walk through the chart in words. On the 4H timeframe, ZEC is trading inside a range between roughly $1,080 and $1,385. The bottom of that range held twice this week. Price swept the $1,112 level, dipped into the $1,080s, and bounced hard both times. That is strength inside a range, not weakness.
My point of interest, or POI, sits between about $1,080 and $1,145. It covers the wicks of the two biggest red candles of the week, which is where the real buying showed up. The rejection candle on October 15 had its whole body inside that zone.
The pattern I want to see is a three touches setup, or TTS. Price taps a level, pulls back, taps it again, pulls back less, then taps it a third time and breaks. On this chart, the level to watch is around $1,188. Price is above it now, so the pattern plays out if ZEC pulls back toward $1,188, dips into the POI, and then prints a bullish reversal candle from there. That reversal is my trigger. No reversal, no trade.
If you’re new to reading ranges and sweeps, my market structure guide covers the basics.
Entry, Stop and Three Take Profits
Here is the plan, with the numbers I’ll use:
- Entry: inside the POI, between $1,110 and $1,140, only after a bullish reversal on the 4H
- Stop loss: below the POI low, around $1,075
- TP1: $1,314, the first prior resistance
- TP2: $1,385, the high from October 6
- TP3: $1,443, the full measured move
That last target is about 27% above the POI. The $1,350 level sits between TP1 and TP2 and acted as resistance on October 12, so I expect a reaction there too. However, I’m not placing a take profit on it.
At a $1,125 entry with the stop at $1,075, the risk is about 4.5%. TP1 alone pays nearly 17%, so the first target already returns over 3R. Consequently, I’ll move the stop to break even once TP1 fills. Everything after that is a free trade. My risk management tips explain why I size every position from the stop, not from the target.
What Would Break the Setup
Two things. First, a 4H close below $1,075 means the range failed and the POI is gone. In that case, I’m out with a small loss and I wait for a new structure to form. Second, price could simply never pull back. If ZEC rips through $1,188 and reclaims $1,314 without touching the POI, I’ll miss the entry. That’s fine. Chasing is how my first ZEC long ended with a stop out at $545 earlier this year.
Hot macro is the main risk. The Fed meets on October 27 and 28, and a hawkish surprise would hit leveraged alts first. For that reason, I keep this trade small until the meeting is out of the way.
My ZEC DCA Is Still Running
The trade above is a swing. My core position is a different story. I’ve been DCAing spot ZEC since the summer, and I wrote about the thesis when Zcash broke $1,500. That DCA is still ongoing, with a few more weeks of scheduled buys ahead. This week’s flush doesn’t change the schedule. If anything, it gives me better fills.
I also left a set of limit orders well below the market for exactly this kind of flush. None of them filled. The low came in just above my levels, and then price bounced. By the end of October, I’ll decide what to do with that budget: lower the orders, add them to the DCA, or hold the cash for the Fed week. I’ll share that in a trading post once it’s decided.
Spot and the swing trade stay separate. The DCA is a nine to twelve month hold, and I don’t trade around it. If you want to start a position of your own, my guide on how to buy Zcash covers the exchanges that still list ZEC, and the Zcash wallets post covers where to keep it.
Why I Still Like ZEC Here
Nothing in the privacy thesis changed this week. Shielded supply keeps growing, the ETF is live, and institutions are still accumulating. The correction was leverage unwinding after a vertical rally, not a change in fundamentals. A 15% dip after a run from $50 to $1,595 is normal. Honestly, the surprise is that it took this long.
Still, I respect the chart. A range is a range until it breaks, and I’d rather buy the bottom of it with a stop than buy the middle and hope.
Keep This Content Free
Planning a trade with three targets takes more time than tweeting a chart. If this setup helps you, support the site by signing up through our links, at no extra cost to you.
Want the entries and exits before they hit the blog? Subscribe to the trading newsletter.
Final Words
Zcash held $1,000 and bounced to $1,250. My plan is a long from the $1,110 to $1,140 POI on a bullish reversal, a stop near $1,075, and targets at $1,314, $1,385 and $1,443. The DCA keeps running for a few more weeks, and my unfilled limit orders get a decision at the end of October. Until then, I let price come to me.
FAQ
Why did Zcash drop 15% on October 15?
Hot CPI and PPI prints raised Fed hike odds and triggered nearly $1 billion in crypto liquidations. ZEC, the most crowded alt of the quarter, lost about $20 million in leveraged longs in one session.
Did ZEC break below $1,000?
No. Zcash came within a few dollars of $1,000 but never closed a 4H candle below it. Price bounced to around $1,250 the next day.
What is a three touches pattern?
A three touches setup forms when price tests a level three times with shallower pullbacks each time, then breaks through. It signals that sellers are running out of supply at that level.
What are my ZEC targets?
TP1 at $1,314, TP2 at $1,385 and TP3 at $1,443, with the stop near $1,075 below the point of interest.
Is now a good time to DCA into Zcash?
That’s a personal decision. My own DCA continues for a few more weeks because the privacy thesis hasn’t changed, and I treat dips like this one as better fills.
