ZRC surges over 19% following Bithumb listing, but can the rally sustain?

ZRC, the native token of the Ethereum layer-2 network Zircuit, surged over 19% after its listing on Bithumb, a prominent South Korea-based crypto exchange. The altcoin reached a high of $0.079 on January 13, marking a 24.8% increase from its weekly low of $0.063. This price rally brought ZRC’s market capitalization to over $160 million, and its trading volume saw a 69% increase, jumping from $32 million to more than $56.8 million.

The surge in ZRC’s price follows the announcement that Bithumb would list the token with a KRW trading pair on January 13. Listings on major exchanges like Bithumb often lead to price rallies for the listed token, although such rallies are sometimes followed by corrections as investors sell their holdings in a “sell the news” scenario. A similar occurrence happened with Safe Wallet’s SAFE token, which saw a rally ahead of its listing on Bithumb but subsequently reversed its gains.

ZRC’s rally was also bolstered by its increasing presence in the DeFi space, with its total value locked (TVL) soaring to $725 million, a significant rise from $256 million at the end of 2024. The majority of this growth is attributed to Zircuit’s staking protocol.

Despite the positive momentum, there are concerns that the price rally might be unsustainable. Data shows that a larger portion of ZRC tokens is being moved to exchanges, which could create selling pressure and potentially reverse recent gains. On January 13, approximately $3.35 million worth of ZRC was sent to centralized exchanges, while only $3.28 million was withdrawn.

In terms of technical analysis, the daily chart shows ZRC has risen above the middle Bollinger Band at $0.71, suggesting a potential shift back to a bullish trend. The Moving Average Convergence Divergence (MACD) indicator also points upward, indicating a possible bullish reversal. If this positive trend continues, ZRC might test the $0.8 resistance level, which it struggled to surpass in late December. However, if bearish sentiment takes over, the price could fall to the $0.064 support level.

At the time of writing, ZRC remains 24.4% below its all-time high of $0.097, recorded in November 2024.

In conclusion, while the recent rally is promising, it remains to be seen if ZRC can maintain its upward momentum, especially given the risk of a sell-off and the ongoing market volatility.