Zcash Price Dives 23% as Grayscale ETF Reverses Course

Zcash's (ZEC) price has taken a hit after a blistering run in September, plummeting roughly 23% from its peak of $1,697 on September 27 to around $1,335. This decline coincided with a sharp reversal in Grayscale's zcash ETF, where approximately $93 million exited during its first negative week.

The ETF's reversal is significant because it marks a change from a structural buyer to a potential source of supply. During September, in-kind creations parked ZEC inside the fund, taking it out of circulation. However, with redemptions now in full swing, authorized participants are receiving ZEC and can sell it, adding to the available supply.

The falling ZEC price has also flushed out leverage, with futures open interest dropping from a September peak above $3.4 billion to around $2.5 billion. This has left traders watching to see whether the $1,270 to $1,300 price floor can withstand the pressure.

While the $1,270 to $1,300 range holds the key to ZEC's future, it's essential to note that the ETF remains net positive since August 25, and shielded holdings remain above 4.89 million ZEC. This suggests that the price decline is not due to a loss of interest in Zcash's privacy features, but rather a correction in the market.