Trader Faces $22M Risk on Major Zcash Short—Up $3.6M but Liquidation Threats Persist

A significant crypto whale has placed a $22.3 million short wager on Zcash (ZEC), which has so far yielded about $3.6 million in unrealized profits. However, the trader is in a precarious position, as the risk of liquidation looms.

Key Takeaways

A whale has achieved $3.6 million in unrealized profits from a $22.3 million short position on Zcash.
Liquidation points for the leveraged trade are approximately $792-$810 for 10x leverage and $864-$900 for 5x leverage.

The cryptocurrency market has been buzzing as a notable whale has made a striking short bet of $22.3 million on Zcash (ZEC) amid its decline from recent highs. The result is about $3.6 million in unrealized gains, but the trade hangs in a delicate balance where a misstep could lead to significant liquidation.

Trader risks $22M on massive Zcash short—Up $3.6M but liquidation looms

Whale Takes Bold Short Position in Zcash

Recent data from Arkham Intelligence shows that a whale wallet has been actively shorting Zcash for two consecutive days. It appears the wallet opened its positions as ZEC attempted to retest the mid-$700 price range. The trader tactically utilized both GMX Market and Hyperliquid platforms to construct a leveraged position, shifting several hundred thousand USDC across multiple transactions.

Currently, ZEC is trading at $604.66, representing a nearly 14% drop from the time the whale likely entered the market. This translates to approximately $3.6 million in unrealized profits from the hefty $22.3 million position. However, it's essential to note that these profits are theoretical until actualized, and leveraging carries the risk of magnifying losses.

Zcash Open Interest

Potential Risks of the Trade

Zcash experienced an explosive growth of over 1,500% in a mere two months, skyrocketing from around $50 in September to a peak exceeding $750 in mid-November. This dramatic rise drew a surge of speculative interest.

The open interest in ZEC futures surged from $10 million to over $1.5 billion—a staggering 150x increase, indicating precariously high leverage within the market. The whale's bet hinges on the belief that the bull rally is not sustainable, and thus far, their prediction seems correct.

Funding rates for the asset slipped into negative territory around November 15-16, indicating that short sellers are paying longs to hold their positions. This shift often points to a bearish market sentiment taking hold.

However, the trader faces significant risk: should they have utilized 10x leverage with an entry point near $720, liquidation could occur at approximately $792-$810—a modest 10% increase from current levels. Even with a more conservative 5x leverage, a return to the $864-$900 range could wipe out the whole position.

Currently, ZEC’s Relative Strength Index (RSI) stands at 61.11, placing it in neutral territory. This situation allows for the possibility of the price dropping to the $500 range before becoming oversold, potentially offering more profit room for the short position.

Zcash price trend

Is This a Strategic Move or a Risky Gamble?

The whale’s wallet currently holds an estimated $1.6 million in assets, primarily composed of USDC stablecoins, suggesting that they might have already secured partial profits or are managing their risk prudently.

In the coming days, the outcome of this trading strategy will reveal whether the trader executed a smart short or if they will end up as a cautionary tale regarding the pitfalls of leveraging trades in the volatile world of cryptocurrency.