Zcash jumps 14% to $487 as privacy coins lead crypto rotation

Privacy-focused cryptocurrencies are drawing fresh capital as investors rotate into a sector that spent years in the shadows.

Zcash rose 14% to $487 in the 24 hours to 14:00 UTC on June 12, leading a broader rally in privacy coins as capital rotated into an area that investors had largely ignored since 2022.

"The move is driven by short covering and renewed spot buying after the Orchard vulnerability panic," a pseudonymous analyst at on-chain data provider CryptoQuant said. "The absence of any exploitation evidence has restored confidence."

The rally extended a recovery from a 50% plunge on June 5, when ZEC fell to around $250 after founder Zooko Wilcox disclosed a critical vulnerability in the network's codebase. Trading volumes nearly doubled to about $1 billion over the past 24 hours, representing roughly 10% of Zcash's circulating market capitalization, according to CoinGecko data. About $21 million in ZEC short positions were liquidated across exchanges in the past two days, per Coinglass.

The rotation into privacy coins comes as Bitcoin dominance slipped from 56.79% on June 10 to 56.06% by June 16, with the "Others" category — tracking every coin outside Bitcoin, Ether, and stablecoins — rising from 21.23% to 23.14%, according to TradingView data. ZEC now faces resistance at its 200-day moving average near $524; a breakout above $500 could open a path toward $550 to $600, while a failure to hold above $416 would risk a retest of the $300 area.

Short Squeeze Amplifies the Recovery

The ZEC rally accelerated as bearish bets built during the crash were forcibly closed. The Relative Strength Index climbed to 77 on the 4-hour chart, above its signal line, indicating strengthening bullish momentum, according to CoinGecko data. Rising trading volumes supported the possibility of continued upside pressure, though analysts cautioned that strong rallies after major negative events can produce false breakouts when fueled by short covering.

Despite the price recovery, on-chain data showed caution among some long-term holders. Nearly 800,000 ZEC tokens — worth roughly $400 million at current prices — were withdrawn from the Orchard Pool, Zcash's largest shielded pool, since the exploit disclosure, per blockchain data.

Privacy Sector Draws Broader Attention

Monero, the other major privacy token, also gained as the sector-wide rotation gathered pace. The move follows weeks of capital being tied up in the SpaceX IPO, with investors selling crypto and stocks to free up cash for the listing. With the IPO now trading, money is flowing back into digital assets, and the early returns favor altcoins over Bitcoin.

Spot Bitcoin ETF products posted a net outflow of $64.09 million on June 15, while Ether, Hyperliquid, XRP, and Solana funds all pulled in fresh money, according to data cited by Standard Chartered's Geoff Kendrick.

This article is for informational purposes only and does not constitute investment advice.