• The Zcash community is gearing up for the first halving and a major network update.
  • The event may have positive price implications in the long run.

Zcash is the 34th largest digital asset. It was born on October 28, 2016, as a decentralized cryptocurrency focused on privacy and anonymity based on zk-SNARK zero-knowledge proof technology. The project has already undergone several protocol updates; however, it will now experience its first halving, which means that the remuneration of ZEC miners will drop from 6.25 ZEC to 3.125 ZEC per block.

Halves are part of the business model of many cryptocurrencies. They help control network inflation and ensure that coins are issued at a steady rate with a predictable rate of decline.

The process is generally automatic and does not require additional preparatory steps from the token holders. However, Zcash’s halving will be accompanied by the fifth major system update known as Canopy, including five significant improvements to the ZCash blockchain.

Here’s what zec holders need to know before the event

Zcash’s halving will occur at block 1,046,400. Based on current estimates, it will occur on Wednesday, November 18 at 12:37 UTC; however, the actual time may differ as it depends on the block discovery rate.

Half Zcash Countdown

Usually, the reduction in the supply of parts leads to an increase in prices. However, according to Ryan Watkins, crypto analyst at Messari, this time the bulls’ hopes may not be met. The expert notes that Zcash miners are only responsible for 5% of Zcash’s daily trading volumes, which means they have little influence on the market price of the coin.

However, Zcash’s halving may have long-term implications for the coin’s price and create short-term spikes in volatility as stakeholders, including miners, try to adjust to new market conditions. network.

Founder’s Award is about to expire

Zcash miners aren’t the only ones to see their pay cut in November. As the team plans to roll out the Canopy update, the Founder’s Reward will expire and a new development fund will be introduced. As FXStreet previously reported, miners will only receive 80% of the block reward, while 20% will be split between developers, investors, and founders. The scheme will be in effect for four years.

At the ZEC’s current exchange rate, the new development fund will raise around $ 70 million, while $ 28 million will go to third parties outside of Electric Coin, the team behind Zcash’s core development.

Zcash price implications

As of this writing, ZEC / USD is changing hands at $ 63. The coin has lost more than 4% since Tuesday, although it is still around 6% higher on a week-to-week basis. While halving events tend to be bullish for the price of the digital asset, the positive effect may take time to manifest.

For example, the price of BTC barely budged after its third halving in May 2020. Additionally, if history is a guide, Zcash’s price may rise before the event due to increased attention from community and pull back slightly for another bullish wave. In the financial world, this phenomenon is known as “buy the rumor, sell the fact”.

As it stands, Zcash traders shouldn’t expect miracles and be prepared for potentially large price moves in the short term.

ZEC / USD daily chart

ZEC / USD daily chart

From a technical standpoint, the ZEC / USD is supported by the daily EMA200 located near $ 60. This support separates the coin from a strong sell off towards $ 50, the level that served as a safety net for ZEC in June and July and was verified as strong support on several occasions in September and November.

On the upside, a sustained move above $ 67 is needed for the recovery to gain ground, with the next target being $ 74. This area halted the bullish momentum in October and also served as channel support during the August consolidation period. A sustained move above this area will set the stage for a move towards $ 85.