ZCash (ZEC) was one of the most active assets in the past month, both on exchanges and on-chain. The ZCash network passed Ethereum and Solana in fee production, even without apps.
The recent ZEC rally coincided with the highest level of on-chain activity for the ZCash network to date. The ZEC usage surge was happening on its Solana version as well as the mainnet ZCash chain.
ZCash moved ahead of Solana and Ethereum, lining up behind TRON as the second-biggest network in terms of fees produced for the past 30 days. The record arrived even after ZEC supplied additional volume through its Solana DeFi version, traded on decentralized exchanges.
Some of the coin movements were linked to the activity of the Orchard privacy pool, with near-record transfers for bridging and moving ZEC to its protected version.
The increased activity allowed ZCash to produce $47.5M in fees, a total of 2.6% of all fees produced by major blockchains.
ZCash transactions peaked in November
ZCash transactions peaked on November 13, at over 73K daily. Later, the transaction pace shifted to a higher baseline. The ZCash network saw almost negligible transactions in the past years, despite claims to potentially displace BTC.
The recent on-chain activity showed that a relatively small number of wallets boosted the activity. ZCash is also ranked 13th based on the largest number of daily active wallets. A total of 11.59K wallets are moving coins on the main network of ZCash.
The recent rally sparked suspicions that ZEC was a potential exit for early buyers, miners, or actively trading whales. ZEC broke out and reached a peak not seen since 2018, with several expansions above $700.
The increased transactions also coincided with the spike in ZEC mining. The ZCash chain hashrate is near an all-time high, doubling since June.
Can ZEC survive its latest downturn?
ZEC has shown remarkable resilience, rising on a series of short squeezes. ZEC retreated to $562.94 after another failed attempt to recover to over $700. For now, ZEC seems to have abandoned its quest for $1,000.
Privacy coins as a whole have taken a step back, with their total market cap falling below $20B. ZEC is still the leader, followed by XMR. Most of the other smaller privacy coins have erased their rallies.
ZEC short positions make up 55% of open interest, though only 44% of whales on Hyperliquid are going short. Of those whales, most are paying significant fees to hold their positions.
The ZEC rally is also unpredictable, potentially moving in to erase short positions up to $620. In the short term, ZEC has no real chance of going back above $700, based on open interest and the potential for a short squeeze.
One of the theories for ZEC, except for the attention of crypto influencers, is that the coin is used to anonymously cash out of old BTC positions. The shift to ZEC trading happened as a record number of old BTC whales moved their coins.
ZEC has crashed at prices above $700, sparking fears that any rally could be used as a chance for ZEC whales to dump more coins. ZEC is sold to a new wave of retail, but over the years, it was accumulated into the wallets of early whales and miners.
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