On September 6, ZEC short liquidations accounted for over 98%.
Approximately $4.11 million in short positions were liquidated, while long liquidations were only about $80,000.
Two days ago, ZEC broke through $1,000 for the first time. In that 24-hour period, shorts absorbed 94% of total liquidations—$34.5 million from shorts, and only about $1.5 million from longs.
This is not a balanced bull-bear rally. This is a one-sided crush.
Someone lost $890,000 within 3 hours. A whale shorted 8,120 ZEC at $1,245 with 10x leverage, a position worth $10.11 million. When ZEC rose above $1,390, the short was fully liquidated.
Some lost even more. Garrett Jin, the largest on-chain ZEC short, started shorting when ZEC was around $400. When ZEC approached nearly $1,400, his short position size rose to $50.99 million, with unrealized losses exceeding $25.85 million.
Last night, he added 5,000 short contracts at $1,252.5, spending $6.26 million.
The more he loses, the more he shorts; the more he shorts, the higher the price goes.
This is a short squeeze.
Why does the price rise more fiercely when shorts are liquidated?
The mechanism is simple. When shorts are liquidated, they must buy ZEC to close their positions. Concentrated short positions are triggered at similar prices, creating positive feedback: price rises → liquidation → forced buying → continued rise.
In two trading sessions, about $79.5 million in short positions were liquidated. Each liquidation is a forced market buy. These buy orders have nothing to do with real spot demand; they are purely mechanical reactions of leverage.
"Liquidation-driven buying is temporary. Once fragile short positions are cleared, the market needs new spot demand to sustain momentum."
But the problem now is—the shorts are not fully cleared yet.
Among Binance’s top traders, short accounts make up 72.05%, longs only 27.95%, with a long-short ratio of 0.39. Funding rates remain negative, meaning shorts are paying to short.
Shorts are still adding positions; the short squeeze is not over.
But the real danger lies on the other side.
On Hyperliquid, the notional value of ZEC open interest rose to $840 million, surging 60% in 24 hours, a record high. The total market open interest is about $2 to $2.4 billion.
What does this mean?
Shorts outnumber longs by about 20 times. The market is still dominated by leverage.
When shorts are squeezed, they are forced to buy and push prices up. But what if prices start to fall?
Longs do not have the same forced buying mechanism. Long liquidation means selling. If market sentiment reverses, a long liquidation cascade could be more violent than a short squeeze—because shorts have liquidation price support, longs do not.
Wang Chun, co-founder of F2Pool, defines this rally as a "narrative-driven short squeeze"—driven by exchange listings, speculative momentum, and forced liquidations, rather than any substantive change in Zcash’s actual use.
On-chain privacy usage growth has not kept pace with price increases.
What’s rising is leverage, not demand.
The most dangerous moment in a short squeeze rally is not when shorts are eliminated.
It’s when everyone thinks it will never fall.
$BTC$ZEC$DASH
Disclaimer: OKX Orbit content is provided for informational purposes only. Learn more
