ZCash (ZEC) was among the few major digital assets to extend its growth through the recent crypto market weakness, holding above the $1,200 level even as Bitcoin (BTC) dipped below $80,000.

ZEC traded at $1,241.59, up roughly 2% over the past day, according to CoinGecko data, while the broader market turned lower. Volumes pushed to a one-week high of $789.16M, with most activity concentrated on Binance and OKX, two of the token's key liquidity sources.

ZEC has entered another cycle with expectations of a price drop. The coin already slid from the $1,600 range over the past month, but recent price action suggested it remains unpredictable in the short term and may trigger liquidations.

Open interest — the total value of outstanding futures contracts — remains elevated at more than $1.5B. Over the past month, futures trading's influence on ZEC accelerated, driving some of its recent moves. As a result, ZEC rallied beyond the initial hype fueled by spot buying. Open interest added around 4% in the past day as more whales took directional positions, including shorts against the coin.

ZEC supported by another short squeeze

Short open interest stands at around 48%, while funding rates remain positive — meaning long positions pay shorts to hold their side of the trade. Overall, the market shows a prevalence of long positions, and certain whales have moved in with aggressive shorting, as noted in market commentary on X.

On-chain data shows a total of 532 whales holding short positions on ZEC, up from 500 just a day earlier. Positioning data also shows only 15% of whales hold long positions on ZEC as a whole, while crowd money is 50% long.

While the recent price move may be partially a short squeeze — a rapid rally that forces leveraged short sellers to buy back and close positions, adding further upward pressure — ZEC is currently balanced in a tight range. Both long and short positions sit within a thin margin of the market price, potentially triggering more liquidations in either direction. Per CoinGlass liquidation data, ZEC may also be threatened by a $4M sell wall at $1,232, capable of setting off a wave of long liquidations.

ZEC perpetual futures trading has expanded significantly on Hyperliquid, a decentralized exchange specializing in perpetual contracts, which now surpasses Binance in open interest. Whales on Hyperliquid have taken the opposite stance, with over 74% holding long positions. The leading whale positions are still short, however, with the top whale holding a $65M position and $5M in unrealized profit.

At the same time, ZEC traders may attack those whales in an attempt to liquidate their large positions before they close them. Hyperliquid whales currently also receive significant funding fees for holding positions on the short side.

ZEC shielding recovers in new pool

Shielded pools are a core component of ZCash's privacy model, and the ZEC shielding issue is being resolved, as the compromised Orchard pool has been emptied out. More than 4.98M ZEC are now shielded, with around 4.7M moved to the new Ironwood pool, per ZecHub's dashboard, which has resolved the potential unlimited minting bug.

Shielding may be a bullish factor, though concerns persist that it could serve as a mechanism to disguise funds from previous hacks. On-chain investigator ZachXBT has traced a potential 2.7K ZEC into the Ironwood pool, which has been linked to the Bitget hack from September 2026.

Shielding takes ZEC off the market, but may not be the scarcity signal traders expect. As ZEC activity shifts to perpetual futures markets, speculative positions may be more influential than spot ownership and more closely watched for signs of a breakout. Those moving parts — funding flows, whale positioning, the $4M sell wall at $1,232, and the pace of the Ironwood migration — now define the indicators to watch as ZEC's tight range plays out.

The bullish narrative for ZEC still exists, with expectations that the price will move to a higher range over a longer time frame.