Zcash ZEC drops after derivatives liquidations following mid-May rally

Zcash’s token, ZEC, surged to multiweek highs in mid-May before pulling back sharply as derivatives traders reduced leverage, according to market data, with the latest move highlighting the volatility that has accompanied renewed interest in privacy-focused cryptocurrencies.

After climbing above 570 on May 14 and reaching a peak reported at 642, ZEC fell back below 550, trading around the low 530s. The selloff coincided with a wave of liquidations in Zcash futures: more than 5.1 million in positions were liquidated over a 24-hour period, while open interest declined to about 978 million from roughly 1.52 billion recorded on May 9. Analysts said the pattern suggested traders were adjusting risk exposure following the rally rather than committing to a sustained selloff. Still, they noted that ZEC’s next trading range could be determined by whether buyers defend key technical levels around 500.

Several forecasts tied to recent price action emphasized uncertainty. One scenario described by traders is that holding the 500 area could allow ZEC to retest prior resistance levels above 700, while a breakdown could lead to a faster correction toward lower support zones, including targets...