ZEC sinks 21%, triggering more than $6M in long liquidations

ZEC was unable to go against the market on Monday, as most assets lost value. The privacy coin crashed by over 21% within hours, tracking the losses of BTC. 

Zcash sank to $360.35, unraveling rapidly during Asian trading hours and early European trading hours. The coin broke down its support above $440, setting expectations for a slide as low as $340, and possibly below $300. 

The recent ZEC slide also showed the rally above $700 was not entirely sustainable, despite going against the market direction. ZEC trading volumes also tapered off in the past week, only accelerating during the latest selling event. 

The Zcash price crash followed a statement by Vitalik Buterin, urging the community to stay away from token-based governance to avoid future problems. 

ZEC has long liquidity

Open interest for ZEC also slid below $500M, while short positions shot up again. Over 45% of Zcash positions are attempting to short at this price level, increasing from a previous low of around 30%. 

ZEC short sellers almost gave up in the past month, as each attempt to short the token caused a short squeeze. This time around, short positions may allow a retrace to around $440. 

During the latest downturn, Zcash liquidated most available long positions, down to the $360 range. At this point, ZEC may attempt a reversal, if market conditions do not cause further crashes. 

ZEC is getting more aggressively shorted on Hyperliquid, with 13 out of 20 whales taking short positions at various price levels. Some are paying negative fees for a chance to bet on a ZEC price slide. Whales with long positions are also feeling more pressure. One of the top whales still carries $4.4M in unrealized loss, recently adding collateral to retain the position, making a bet on a ZEC reversal. 

On Polymarket, the chances of Zcash rallying to $1,000 by the end of the year have collapsed, down from 42% in November to 8% after the latest crash. 

ZEC sinks as altcoin season unravels

Zcash fell against Bitcoin, sliding below 0.005 BTC. The current altcoin climate also worsened, as the altcoin season index fell back to 26 points. 

The ZEC rally was one of the few engines for a higher altcoin index. The recent price drop also increased the concerns that Zcash was an exit pump for whales, and was artificially boosted, based on a mix of whale buying and short liquidations. 

Privacy coins as a whole erased more of their value, with total market cap falling below $17B. Zcash lost its top position as the biggest privacy coin, as Monero (XMR) regained the top spot. 

XMR rose by over 9% net in the past week, to trade above $418. XMR was also the only privacy coin in the green, potentially replacing ZEC as the asset that pumps counter to the market. While other privacy coins failed, XMR raised a new hope for a rally after years of sideways trading, repeating the performance of Zcash. However, the lesson of ZEC may also increase skepticism on the potential for a sustainable price expansion. 

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.