Zcash (ZEC) has recorded significant gains over the past week, surging 51% to trade near $1,244 on September 10. This rise has been driven by a substantial spike in interest for Grayscale’s recently launched Zcash ETF, which has absorbed large amounts of ZEC from the market.
ETF launches trigger new demand
Over a fourteen-day period, ZEC rallied 60.3% and has soared 153% in the past month, according to CoinGecko. The token climbed from approximately $814 on September 3 to more than $1,200 within three days and has managed to sustain most of these gains despite minor pullbacks.
Much of this momentum is attributed to Grayscale’s Zcash ETF, which began trading on NYSE Arca on August 25. As of September 8, the ETF, trading under the ticker ZCSH, managed $532.9 million in assets and was holding 464,514.86 ZEC. The fund reached over $500 million in assets within just two weeks of its debut, reflecting robust investor demand.
Grayscale, a prominent asset manager focused on digital currencies, reported cumulative inflows exceeding $70 million since the fund’s inception. On the same day, trading also began for ZCSH options on NYSE Arca, potentially increasing market activity around the fund.
Part of the fund’s assets were supplied by DCG International Investments, an arm of Digital Currency Group (DCG), a major investor in the crypto space. Recent filings with the US Securities and Exchange Commission revealed that DCG contributed nearly $100 million worth of ZCSH shares through a deposit of 85,705.33 ZEC via an authorized participant.
Grayscale’s Zcash ETF held $532.9 million in assets under management with more than 464,500 ZEC as of September 8, reaching the $500 million level within just two weeks of its launch.
Mini dictionary: Grayscale is a leading digital asset manager best known for its cryptocurrency investment products, including exchange-traded funds (ETFs) and trusts, designed for institutional and individual investors seeking exposure to cryptocurrency markets through traditional financial products.
Zcash holdings by large entities also extend beyond ZCSH. Cypherpunk Technologies, a digital asset company, reportedly held 323,394.38 ZEC as of August 18, which is about 1.92% of ZEC’s circulating supply. The company boosted its exposure in August with a $33.33 million equity arrangement involving Winklevoss Capital.
This deal enabled Cypherpunk to establish a US-based mining operation with 4.2 gigasolutions per second (GSol/s) of Equihash computing power, accounting for approximately 18% of total Zcash network hashrate at launch. Cypherpunk set a long-term target of holding 5% of Zcash’s supply and noted that around 43,800 ZEC are distributed to miners each month.
Mini dictionary: Equihash is a proof-of-work algorithm designed for efficient mining of privacy-focused cryptocurrencies like Zcash, offering resistance to specialized mining hardware and promoting decentralized network participation.
Short liquidations fuel rapid rally
Accelerating the initial phase of the rally, short liquidations reached $13.51 million on September 4 and rose to $27.98 million on September 6, based on data from Sharpe Terminal. These forced closures of short positions pushed traders to buy back ZEC as the price breached the $1,000 and subsequently the $1,200 levels.
| Date | ZEC Short Liquidations | ZEC Price Level Broken |
|---|---|---|
| September 4 | $13.51 million | $1,000 |
| September 6 | $27.98 million | $1,200 |
ZEC price analysis and technical outlook
ZEC recently held near $1,240 on the daily chart, reaching an intraday high of $1,256.80. It has remained above $1,100 since the latest breakout and is now testing resistance between $1,250 and $1,280, a zone that halted previous upward attempts.
Technical indicators show bullish momentum. The 20-day exponential moving average (EMA) stands at $963.65, while the 50-day, 100-day, and 200-day EMAs are $766.59, $639.54, and $526.63, respectively. All are rising, with shorter averages above longer-term ones, and ZEC trades above each measure.
The distance between the current price and the 20-day EMA, almost $280, indicates a sharp departure from recent short-term trends and suggests a potential pullback could occur if buying momentum decreases.
The Parabolic SAR indicator remains below ZEC at $917.58, supporting the current uptrend, with no reversal signalled so far. A close above $1,280 could enable a further push toward $1,400, while $1,500 has emerged as a psychological target approximately 21% above current levels.
On the 4-hour chart, ZEC has consolidated near its highs, with the Aroon Up at 71.43% and Aroon Down at 0%. This gap shows persistent bullish momentum, although recent sideways movement has tempered some of the upward drive.
If ZEC can break through $1,280 with renewed momentum, a fresh high is possible. However, a drop below the $1,200 and $1,150 support levels could weaken the price structure. On-balance volume (OBV) remains elevated at around 2.49 million, signaling strong cumulative buying interest, but a decline in OBV could point to increasing selling pressure during the consolidation phase.
The daily close above $1,280 remains a key short-term level for ZEC bulls, while failure to hold $1,150 may result in the asset retesting $1,100 or even $1,000, with technical support found near the rising 20-day EMA.
