Zcash has traded within an ascending channel since mid August. As a result, the privacy coin jumped to a high of $1296.
However, after reaching these levels, the altcoin slowed down and retraced to a low of $1204. Amid this volatility, Zcash was trading around $1224, down 1.59% on the daily charts.
Even as ZEC still holds above $1.2k, traders are still aggressively shorting the market.
Zcash trader takes a $6.4 million bet
With Zcash [ZEC] holding strongly above $1.2k, some traders are still betting for a significant price drop. Lookonchain reported that a trader deposited 2.19 million USDC into Hyperliquid and opened a 3x short on 5,200 ZEC worth $6.49 million.
With traders opening the short position, it reflects bearishness, anticipating a potential price drop. However, the market remains overly volatile and liquidation risk is extremely elevated.
In fact, over the past 24 hours, both longs and shorts were liquidated, with total liquidations exceeding $13 million. Out of these liquidations, shorts accounted for $$6.9 million while longs accounted for $6.4 million.
With traders being forced out on both sides, it reflects strong market volatility. But despite growing liquidations, traders continue to deploy more capital to open new positions.
Risk appetite still remains
According to CoinGlass data, Zcash saw $2.59 billion in futures Inflows compared to $2.56 billion.
As a result, futures Netflow although declining by 80% it still remains positive at around $35 million. This suggests that investors are still opening new positions.
Meanwhile, the Long/Short Ratio dropped below 1, falling to 0.95. With the ratio down to 0.95, it suggests that these traders are mostly bearish and opening short positions.
Historically, high capital flow into the futures market has strengthened the demand side, leading to more gains. At the same time, however, increased leverage presents liquidation risks, but since traders are mostly opening shorts, such liquidations could result in gains.
What’s next for ZEC?
Despite the market slowdown, Zcash market momentum still leans bullish. When we look at the ADX-DI momentum indicator, the positive index DI+ has continued to rise, hiking to 41.
At the same time, ADX surged to 69, while the negative index fell to 3. With the ADX and DI+ rising, it implies the uptrend is strong and most likely to continue.
Therefore, if the current trend holds, the short positions being opened will face liquidations and further clear a path for more gains. In such a case, Zcash will retest $1296 resistance and finally flip $1.3k.
However, if the bears manage to finally retake the market and $1.2k fails to hold, a drop to $1023 will follow.
Final Summary
- Zcash trader deposited 2.19 million USDC into Hyperliquid and opened a 3x short on 5,200 ZEC worth $6.49 million.
- Zcash market structure still leans bullish and a daily close above $1.2k will clear a path for another high.
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