ZEC Breakout is a bull trap?

ZcashZEC( ) after President Donald Trump declared a two-week ceasefire deal Iran leads a rally of relief across all global risk markets.

The key takeaways:

• ZEC could drop 40% within the next few weeks according to this fractal in 2021.

• ZEC is exposed to possible crashes due to the over $50 million of long-term leverage that sits under current prices.

ZEC rally may become like a bull-trap of the year 2021

Its highest price since January is $336.50, a rise of over 30% within 24 hours. Monero, one of its top competitors, also rose.XMRDash () is up by 3%.DASHThe % increase is 8%.

ZEC’s recent rebound has started to look like the set-up that came after its peak in 2021. It entered a long-term bear cycle in 2021 after reaching a peak near $392.

ZEC experienced multiple bounces during this correction after it tested its Fibonacci line of 0.238 at approximately $85. However, its upward momentum weakened under a trendline that was descending.

Zcash’s setup is very similar. The 0.236 level of Fib near $197 acts as a strong support. A descending trendline is continuing to limit any upward movement.

ZEC’s continued rise could take it to its Fibonacci Retracement Level of 0.5, near $370. It also coincides with resistance on the downward trendline.

But the rally could lose steam if bulls fail to break above the trend line, raising the risk of a pullback toward the $197–$200 support zone. If that happens, then the current rally may begin to look similar to the 2021 Bull Trap setup.

Related: Zcash devs raise $25M from major VCs months after ECC split

In the opposite scenario, a breakout that is decisive above trendline could trigger a wedge-shaped breakout with an upside target around $1200.

In the past multiple analysts have included BitMEX co-founder Arthur Hayes Alphractal’s CEO and co-founder Joao WedsonZEC is predicted to be priced at $1,000 and higher.

ZEC liquidation data raises downside risks

The heatmap of Zcash liquidation shows a greater risk for the downside in coming weeks.

Binance’s ZEC/USDT contract, for example, may experience $3.81million in cumulative liquidations of short positions if prices rise above $380 over the next few weeks.

If the price of gold drops below $250, roughly $50.56 million worth of cumulative long positions will be lost.

The markets tend to gravitate towards zones with a high concentration of leveraged positions. ZEC has a concentration below its current price. Long liquidations outnumber potential shortliquidations.

The heatmap also highlights $305–$306 as the largest single liquidation pocket, with about $1.76 million in leveraged positions clustered in that range. It is therefore important to monitor this level in the short-term.