Key Highlights
- ZEC surged above $500 after breaking out of a bullish flag pattern, with trading volume and open interest rising sharply.
- Short sellers faced heavy liquidations, with more than $7.64 million in short positions wiped out during the rally.
- Zcash is improving network security through the upcoming Ironwood upgrade after fixing the Orchard vulnerability.
Zcash (ZEC) has gained 13% over the past 24 hours after breaking out of a bullish flag pattern, pushing the token back above the $500 mark.
At the time of this writing, ZEC is trading at $504.21 after recovering from an intraday low between $440 and $450. Trading activity has also increased, with volume rising 34% over the same period to $561 million, while the market capitalization climbed 12% to $8.45 billion.
At the same time, data from CoinGlass shows Zcash futures Open Interest increased more than 17% over the past 24 hours to around $910 million, which suggests that traders are actively pouring into the market. Future volume also surged by 33.67% to around $1.81 billion.
Short liquidations add momentum
The price surge also triggered significant losses for traders betting against ZEC. According to data from Coinglass, about $8.40 million worth of ZEC was liquidated within the last 24 hours of trading.
Short positions accounted for more than $7.64 million of the total liquidations, while long traders faced around $762,000 in losses.
Ironwood upgrade targets network security
The rally comes as Zcash prepares network improvements following the discovery of a vulnerability affecting its Orchard shielded pool. The flaw could have allowed counterfeit ZEC to be created without being detected, although developers said they found no evidence that it was ever used.
In a report released on Tuesday, the company said the issue was fixed through a network upgrade, and developers said there is no evidence that the vulnerability was exploited.
Following the discovery, Zcash developers announced plans for a new shielded pool called Ironwood. Unlike Orchard, Ironwood is reportedly being built with additional security checks, including formal verification and AI-assisted testing, to mathematically prove that the same type of hidden counterfeiting bug cannot exist.
Developer Sean Bowe explained that “Merely patching the recently discovered bug is insufficient,” highlighting the need for stronger security measures. The Ironwood upgrade is designed to improve confidence in Zcash’s privacy system and provide stronger protection against future risks.
Zcash nears next key resistance level
Looking at the 4-hour chart, ZEC broke out after testing a key resistance level around $465. At the time, it was trading near its 50-day Exponential Moving Average (EMA), which sits around $452.
After consolidating downwards for a while, creating a bullish flag pattern on its path, buyers were able to push the price up. This broke the level and started a surge up to $500. However, ZEC is now approaching a major resistance level at $543, a level that the price had reacted to a couple of times.
Breaking above this level would require ZEC to maintain the current momentum. If that happens, we could see another push up to the next resistance level at $628. However, the Relative Strength Index (RSI) shows that the price is approaching an overbought level, which is a level that could attract sellers to take over the movement.
If that happens and aligns with the resistance level, it could lead to 2 scenarios: Price reacts but over for a short retracement and continues the rally, or sellers fully take over and push price back to the support level at $425.
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