On Friday, it rose to $1,029, reaching a nearly decade-high level, and after breaking through the $1,000 mark, it triggered a large-scale short covering. After U.S. employment data exceeded expectations, Bitcoin fell back below $80,000, but ZEC still managed to retain most of its gains, indicating a divergence in its trend from the broader market.
After breaking through $1,000, shorts concentrated on closing their positions
According to Binance data, ZEC reached a high of $1,029 on the exchange, before falling back to around $984, with a 20% increase over 24 hours. CoinGlass data shows that after the price broke through the integer mark, approximately $34.5 million in ZEC short positions were forcibly closed, and the total settlement amount across the network was about $36.6 million.
Short covering usually directly drives up buying volumes, which is one of the reasons why the upward trend continues to expand after breaking through key price levels. According to CoinMarketCap data, Zcash's market capitalization once approached $17 billion, rising to rank it among the top ten largest crypto assets before Doge Coin.
Double in value in one month, rise by over 23 times in one year
This round of increase is not a one-day anomaly. ZEC was around $500 about a month ago, and has accumulated a rise of about 94% in the past 30 days, with a growth of over 2300% in the past year, performing among the top in large-cap crypto assets.
Zcash is a privacy coin project that was launched in 2016, driven by cryptography researchers such as Zooko Wilcox. Unlike Bitcoin and Ethereum, which have publicly available transaction records by default, Zcash uses zero-knowledge proofs to conceal the identities of both parties involved in the transfer and the amount of money transferred, while also verifying the validity of the transaction.
Another factor that has contributed to the increased attention to funds is that Zcash ETF of Grayscale was listed on NYSE Arca on August 25th, with the code ZCSH. This product provides investors with brokerage accounts with a channel to directly configure ZEC without relying on a wallet.
The Fed's expectations and disruptions in employment data affect the broader market
Earlier this week, Federal Reserve governor Christopher Waller indicated a tendency to remain cautious, which led to a decrease in the market's expectations for a rate hike in September and also triggered a broader short covering in the crypto market. Reports mentioned that at that time, the scale of short liquidations across the market exceeded $415 million, and Bitcoin briefly regained its level above $80,000.
However, the U.S. non-farm payroll data for August, released on Friday, was significantly stronger than expected. The U.S. economy added 162,000 new jobs, exceeding the market's estimate of 56,000, and the unemployment rate remained at 4.1%. After the data was released, markets increased their bets on a Fed interest rate hike at the September meeting, and Bitcoin immediately fell below $80,000.
Against the backdrop of a weakening market, ZEC still maintains a high level, indicating that current funds are more focused on its independent catalysts, including the allocation needs after the listing of ETF, as well as the squeeze effect that has formed after breaking through the integer barrier.
- ZEC High point in the market: $1029
- ZEC 24-hour increase: approximately 20%
- ZEC Short Margin Call: Approximately $34.5 Million
Next, the market will also pay attention to the US CPI data for August to be released next week, in order to determine whether interest rate expectations before the Federal Reserve's September meeting will continue to change.
