We might see a rebound or a resistance at this level. $100 seems to hold its ground pretty well. We shall see if traders consider this a minimum point and if supply can be justified at this price point.
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@Digitmint I called for $100 ZEC on November 6th (Honest Warning about ZCash and its HYPE and PRICE - #4 by vgm), not because I had a crystal ball, but because I understood some basic economic factors which are still at play here.
The decline in ZEC price was a direct result of the mining profitability differential between ETH and ZEC. As long as ZEC mining remained more profitable, there was a huge economic incentive for ETH miners to switch to ZEC and then simply exchange ZEC for ETH on an exchange like Poloniex or Shapeshift. The result for miners was a higher ETH yield per day, and the unintended consequence of this was a large supply of ZEC continuously being sold for ETH. However, this economic incentive was bound to end when the profitability of ZEC mining dipped below the profitability of ETH.
We are now at the point where ETH profitability is beginning to overtake ZEC profitability again, and low and behold we’re starting to see the ZEC price stabilize. It no longer makes any sense to mine ZEC only to sell it for less ETH than you would have got mining ETH straight. This means that either miners will simply revert back to ETH mining, which has already started, or miners will simply hold ZEC instead of exchanging it for ETH. What they definitely won’t do is continue to mine ZEC and sell it right away.
As far as price rebounds go? Don’t expect a bull market in ZEC to magically appear. Supply and demand forces are still the fundamental drivers here, and I believe increasing supply and a lack of demand could see ZEC go as low as $30 in the coming months, because markets have a tendency to overshoot.
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bravo @vgm that kind of analysis make me still have hope in Zcash community. That is right on the spot. Except for the fact of $100. That is unproven how he got there. Theres an explanation between ETH mining/ ZEC mining but that isn’t enought to explain the $100.
The truth is that the supply has dried up
Demand for short term speculation is high
Demand for holding is low
Hashrate is at its max and trending up
Other unsupported thoughs:
the ZEC traders are the dumbest I’ve ever seen together with Ethereum traders. Buy/Sell at market spending more on
fees and impacting its own trade
the bot trader from ethereum is here , I guess it is used to mine/trade . So far is on the BUY side
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Dumbest trading for sure. 3000% decrease in a few weeks
I think it is taking the market a while to catch up to the new reality, feature-wise.
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I agree. First time I’ve personally seen the market cap break $5 million.
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Because the era of mining and dumping seems to be coming to an end. Take a look at this graph:
https://explorer.zcha.in/statistics/value
A week after ZCash came out the blue Unspent Block Reward slice was less than 1%. Today it’s almost 25% and rising.
Miners are starting to hold onto their ZCash so the price stopped dropping. As they are less likely to sell then at times the demand exceeds the supply people are willing to sell below that price.
Simple economics.
I think what happens in China will dictate a lot of what happens to ZCash. Looks like ZEC is primarily traded for Bitcoin (which is 98.9% traded for CNY last I checked) and the secondarily traded for CNY.
