Zcash Price Slides 23% as Grayscale ETF Hits Reverse

Zcash Price Gets Clobbered After September’s Run

Zcash’s (ZEC) price spent September going great guns, then the tape turned nasty. ZEC touched $1,697 on Sept. 27 before sliding to $1,304 by Oct. 3, a roughly 23% haircut from the peak in less than a week.

The retreat broke the $1,500 level, then $1,400, while Grayscale’s spot zcash exchange-traded fund (ETF), also known as ZCSH, simultaneously suffered something it hadn’t experienced since its August debut. Basically, a losing week. With around $93 million leaving ZCSH through Oct. 2, one of the forces that had helped tighten available ZEC supply suddenly started working in reverse. Around $26.93 million of that total left on Friday, according to sosovalue.com stats.

$93 Million Heads for the Exits

The ETF reversal matters to the ZEC price because ZCSH owns ZEC outright rather than futures. During September, in-kind creations parked ZEC inside the fund and away from the open market. Redemptions reverse that machinery. Authorized participants receive ZEC back and can sell it, turning what had been a structural buyer into a potential source of supply.

The change came fast. After $8.12 million left Sept. 28, redemptions reached $30.25 million Sept. 30, roughly $28.26 million Oct. 1, and then the $26.93 million Oct. 2. The week finished with an aggregate total of more than $93 million heading for the exits. Cumulative net inflows fell to $212.56 million, while assets under management dropped from a September peak near $979 million to roughly $751 million. Some of that AUM decline naturally came from the falling ZEC price itself.

There’s another wrinkle. Digital Currency Group, Grayscale’s parent, supplied about $100 million of earlier creation through an in-kind swap of 85,705.32563297 ZEC on Sept. 8. Outside investors, therefore, contributed less to the headline inflow tally than the raw totals suggest.

Falling ZEC Price Flushes Out Leverage

The ZEC price decline had another accomplice: leverage. Futures open interest dropped from a September peak above $3.4 billion to roughly $2.5 billion, according to coinglass.com stats. Traders who piled into the $1,500 to $1,700 extension were caught flat-footed when the price rolled over. Earlier, the arrangement worked beautifully in reverse. Short liquidations helped propel the zcash price through resistance during September’s climb. Once the daily trend cracked, leverage began punishing late longs instead.

The good news for battered bulls is that much of that cleanup appears to have already happened. ZEC’s 24-hour liquidations stood around $1.03 million by Oct. 4, modest compared with September’s squeezes.

The Price Level That Now Holds All the Cards

ZEC’s spot value had bounced to roughly $1,333 to $1,337 by Oct. 4, up about 2% to 2.5% over 24 hours. That’s encouraging, but hardly enough to declare the price dump finished. ZEC’s daily relative strength index (RSI) near 50.6 sits squarely in neutral territory rather than signaling an exhausted market.

The immediate price test sits around $1,270 to $1,300. Losing that shelf puts roughly $1,155 into view, while bulls face the opposite problem overhead. ZEC would need to reclaim $1,360, followed by $1,380 to $1,425, before another run toward $1,500 starts looking convincing. And that’s where the ZEC price story gets interesting. ZCSH remains net positive since Aug. 25, while shielded holdings remain above 4.89 million ZEC.

Zcash didn’t suddenly lose its privacy crowd. What disappeared was September’s relentless marginal buyer. After a month when the ETF helped take ZEC off the street, the fund just spent a week handing some of it back. Now $1,270 to $1,300 has to do what the ETF temporarily stopped doing: find enough buyers to keep the Zcash price standing.