ZEC Falls Below $1,100 Amid Market Selloff Causing Altcoin Decline

Privacy coin Zcash (ZEC) tumbled Friday, briefly dipping below $1,100 amid a cryptocurrency market downturn initially sparked by the release of hotter-than-expected U.S. producer price index data. Market data show ZEC, which peaked at $1,293 earlier in the week, momentarily dropped to $1,055 before recovering to trade just above $1,090 at press time.

ZEC’s more than 10% slide dragged its market capitalization from over $20 billion less than 48 hours earlier to $18.5 billion. Despite this, the privacy coin retained its status as the 10th-most-capitalized digital asset, ahead of Hyperliquid’s HYPE, which dropped 4.2% to leave its market cap at $17.6 billion.

Besides these two recent high-flyers, the rout extended to other high-cap altcoins, including XRP, which dropped 3% to $1.33, and SOL, which slid just below the $100 mark following a 1.7% decline. Bitcoin Cash plunged 8.5%, while ADA, LINK and XLM dropped 5.8%, 4% and 3.3%, respectively.

Ether (ETH) remained virtually unchanged after shedding a marginal 0.5%, leaving its market capitalization at nearly $300 billion. Hunter Biden’s recently launched memecoin was one of the day’s biggest losers after plunging 48%.

Only a handful of altcoins bucked the trend, led by NEAR with a 0.6% gain that brought its weekly increase to 20%. GATE and BITWAY also gained, each rising 7%.

However, because an overwhelming majority of altcoins suffered losses outpacing those of bitcoin, which dropped 1.2% in the same period, the aggregate altcoin market cap plunged from $1.18 trillion to $1.17 trillion.

Meanwhile, a new Bitfinex report noted that bitcoin’s quieter week was not reflected in the broader market, as each of the 29 largest liquid pairs rose between Sept. 1 and Sept. 8. The assets posted a median gain of 10.2%, compared with 1.4% for bitcoin. Polkadot led the surge with a 43% gain, followed by ZEC at 42%, Kaspa at 28.8%, NEAR at 23%, ETC at 19%, and Bittensor at 17.4%. ETH gained 2.8%, lifting its trading pair against bitcoin from 0.0313 to 0.0317, while Bitcoin Dominance fell from 60.4% to 59.2% since the start of the month. Most weekend altcoin gains occurred during Sunday’s Asian trading session while bitcoin remained flat.

Bitfinex attributed the rally to renewed risk appetite following ZEC’s milestone move above $1,000 on Friday, its first time hitting that level since listing in 2016. The surge came two weeks after a spot Zcash ETF launched Aug. 25, attracting $500 million in assets, including roughly $100 million from the sponsor’s parent company.

Analysts explained that leverage routinely flows into smaller assets when bitcoin trades in a range with neutral funding, driving altcoin outperformance and signaling a classic “alt season.” Aggregated open interest on altcoin perpetual contracts overtook bitcoin’s this week for the first time since December 2024.

However, Bitfinex warned that such flips historically lead to either a brief altcoin rotation before bitcoin reclaims the lead, or a sharp marketwide pullback as overleveraged positions flush out. In early December 2024, a similar open-interest flip resulted in a single-day $1.7 billion liquidation event on Dec. 9, 91% of which occurred in altcoins, while bitcoin fell 7%. Consequently, Bitfinex views the altcoin advance as a leveraged bet on bitcoin holding its current trading range rather than an independent market move, warning that a bitcoin drop below its range lows could trigger a similar liquidation cascade.