What To Know:
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ZEC climbed over 700% in two months, outperforming a declining crypto market.
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Shielded pool growth and soaring privacy transactions signaled early demand strength.
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Speculative leverage and heavy short liquidations later amplified the rally’s acceleration.
Zcash saw one of the most unexpected rallies of the year, climbing more than 700% across two consecutive months even as the broader crypto market continues to contract. ZEC rose more than 6% in the past day to reach $621.99, a sharp contrast to the slump pulling most major cryptos lower. The rapid appreciation has triggered renewed attention to the asset’s underlying activity, and derivatives exposure.
Zcash Surges Despite Market Slump
Zcash’s privacy features remain the core area analysts are tracking. Growth in the shielded pool, the network’s protected transaction segment, accelerated sharply in the past six months. The pool expanded from 2.66 million coins to 4.98 million coins, increasing its share of total supply from 18% to almost 30%.
A large portion of that shift concentrated in the Orchard pool, which received about 86% of incoming funds. Weekly privacy transactions also rose steeply. Activity moved from a long-running average of between 30,000 and 40,000 transactions to more than 460,000. These figures indicate a measurable increase in users opting into privacy features rather than keeping funds in transparent addresses.
Through early September, these patterns created a steady foundation for ZEC. The token traded near its long-term floor even as shielded activity gained momentum. Analysts called this stage a demand-led stage in which user behavior strengthened fundamentals without triggering significant price movement. That trend held until late September, when derivatives markets began to reshape ZEC’s trajectory.
Open interest in ZEC contracts has expanded at extraordinary speed. It rose from about $18.75 million to $1.38 billion in a short span, revealing a sudden surge in speculative positioning. Funding rates fell sharply to -0.4192%, a signal that short sellers were paying considerable premiums to maintain their positions. As prices climbed, many shorts were forced out. On Hyperliquid alone, liquidations surpassed $33 million. The combined pressure of rising spot demand and unwinding bearish positions produced a dramatic acceleration. It has pushed ZEC as high as $750 before a brief cooldown.
On-chain indicators show that sentiment has become the primary driver of activity during this phase. Privacy transactions declined as prices surged, while transparent transactions increased rapidly. Newcomers seemed to respond more to price action than to Zcash’s privacy features. This shift has created what several analysts describe as a two-phase market pattern: a fundamentals-supported buildup followed by a sentiment-driven breakout.
The viability of this enthusiasm will be determined much more by fundamentals in coming quarters. As compliance frameworks grow globally, privacy-centric networks are more in focus. The unveiling of MiCA in Europe and similar rulemaking efforts globally have fueled demand for tools that can reconcile the need for confidentiality and regulatory compatibility Zcash’s model, uses optional privacy and the possibility of providing viewing keys and has an edge over other fully shielded alternatives.
Even so, a comparison of ZEC’s current valuation with its usage metrics highlights a wide gap. The shielded pool’s value, roughly $2.8 billion, remains modest next to the total value locked across leading public chains. While privacy transaction rates have also spiked, the ecosystem remains in an early adoption phase. The price trend, by contrast, reflects intense speculative inflows that have outpaced the rate at which real activity is expanding.
The broader market context adds another layer to the analysis. The global crypto market cap stands at $3.22 trillion, which is nearly unchanged over 24 hours but well below recent highs. Bitcoin is trading near $91,569 after a 0.5% rise, far from its recent peak above $126,000. The retracement has erased a substantial portion of market-wide gains built earlier in the year and contributed to the ongoing volatility affecting altcoins.
Also Read: Zcash, ICP, Monero, Uniswap Lead Altcoin Gains in Slow Crypto Month
