Key Takeaways
Why has ZK been volatile over the past 24 hours?
Its 15% rally on Wednesday, followed by a 12% setback in under 12 hours, was due to the short-term range formation for ZK.
What should traders expect for the next price trends?
The bullish 1-day timeframe structure meant that a ZK price dip to $0.065 in search of liquidity would likely see a bullish rebound.
On Thursday, 06 November, ZKSync [ZK] surged by 15% within two hours, from $0.066 to $0.076. In those two hours, Bitcoin [BTC] bounced by 2% from $100.3k to $102.3k, and ZCash [ZEC] was up 6.86%, from $510 to $540.
The performance of ZCash is important because it has been leading the recent craze for privacy tokens and privacy tech. A boost in ZEC prices generally sees tokens such as ZK follow suit.
Over the past ten hours, ZK retraced 1% from the $0.76 local high. In doing so, it showed that a short-term range formation may still be in play. The higher timeframe ZK price structure was bullish, and the uptrend could resume once the market sentiment shifts away from extreme fear.
Short-term range shows ZK’s price is in a retracement phase
Source: ZK/USDT on TradingView
The daily chart highlighted a bullish structure in place after ZK broke past the $0.065 swing high from early October on Wednesday.
The OBV and volume bars reflected heavy demand in recent days, and this bullish structure shift is likely to result in further gains for ZK.
Source: ZK/USDT on TradingView
The 1-hour chart underlined a short-term range formation (yellow) from $0.066 to $0.077. The retracement seen from Wednesday’s high was a rejection at the range high and a move to the range lows.
The OBV and RSI were both neutral, and did now show an advantage to the bulls or the bears. Traders can use a brief dip below the $0.066-level to buy ZK. However, a move below the $0.058-$0.06 area in the coming days would indicate heightened short-term bearish pressure.
This would increase the chance of a deeper price retracement.
Finally, the liquidation heatmap revealed the liquidity built just beyond the extremes of the range. A price dip to the $0.064-$0.065 magnetic zone is highly likely in the next day or two. It would offer a buying opportunity targeting the $0.079-pocket overhead.
Such a price dip might not lead to a deeper retracement to $0.045, the next liquidity pocket, due to the bullish 1-day structure. However, it is a possibility, especially if ZEC and Bitcoin face a bearish setback.
