Key points
- Zcash rose 5% in a derivatives short squeeze.
- NU7 may reduce the block time to 25 seconds.
- Developers will decide on October 20 whether to proceed with mainnet activation.
Zcash (ZEC) rose approximately 5% on October 12, trading near $1,280. Investors are also watching for a major blockchain upgrade scheduled for November, as short sellers face liquidations.
This privacy-focused cryptocurrency outperformed Bitcoin and Ethereum during the recent market rebound, with derivatives activity suggesting that short covering may have driven the rally.
Meanwhile, the Zcash developers are preparing to decide whether to proceed with the NU7 upgrade, which will reduce the block confirmation interval by two-thirds.
Zcash rose 5% after short liquidations.
Based on the market snapshot from October 12, ZEC rose approximately 4.8% over the past 24 hours, while Bitcoin increased by about 0.9% and Ethereum by about 1.2%.
Derivatives data shows that ZEC liquidations amounted to approximately $4.91 million, with $3.87 million coming from short positions. This means that short bets accounted for nearly 79% of the liquidated contracts.
When a leveraged short position is liquidated, the exchange may repurchase the underlying asset, potentially accelerating price increases.
Open interest for Zcash also rose 4.82% to $2.57 billion, indicating that traders are adding positions rather than simply closing them.
However, increased leverage also amplifies losses when prices reverse. ZEC previously experienced a similar short squeeze during its September rally, when derivative positions became the primary driver of volatility.
Zcash NU7 upgrade to activate on November 5
In addition to today's price fluctuations, Zcash is approaching a significant technical milestone.
The NU7 upgrade was activated on the public testnet on October 4, setting the target block interval to 25 seconds instead of the current 75 seconds.
According to the Zcash Foundation, this change aims to reduce transaction confirmation times and improve the network's availability for payments and exchange deposits.
NU7 also introduces a network sustainability mechanism that redirects a portion of transaction fees toward future mining rewards.
This upgrade follows the previous Ironwood security update, which patched a vulnerability affecting Zcash's shielded transaction infrastructure.
Developers plan to review the testnet performance on October 20 and then determine whether to proceed with mainnet activation on November 5. This date is currently only a target and not guaranteed.