TLDR:ZEC led the $212M crypto liquidation wave with $45.32M wiped out as its price surged 15% to about $1,170.Short positions accounted for about $156M of $212M liquidations, showing bearish traders took most losses.ZEC open interest reached a record $2.4B on Sept. 4, up from roughly $700M in early July as leverage grew.Grayscale’s ZCSH drew at least $34.4M in net inflows after its Aug. 25 debut, adding institutional demand.Zcash moved to the center of crypto derivatives trading on September 6 after a 15% rally pushed ZEC to about $1,170. The advance coincided with roughly $212 million in market-wide liquidations, with short positions accounting for about $156 million of the total.Source: XZEC alone generated approximately $45.32 million in liquidations, the largest total among major tokens in the reported data. Ethereum followed with $35.16 million, while Bitcoin recorded $16.79 million and Arbitrum posted $12.93 million. That placed ZEC at more than one-fifth of all liquidations during the period.Short Squeeze Drives the Liquidation ImbalanceThe liquidation data shows how heavily bearish positioning contributed to the move. As prices rose, leveraged short positions lost margin support and exchanges forcibly closed them.Forced short closures require positions to be bought back, adding further buying pressure. Together, those figures showed pressure concentrated in bearish positions rather than long liquidations.The imbalance was visible across the broader market as short liquidations represented nearly three-quarters of the $212 million total. ZEC stood out, however, because its liquidation figure exceeded Ethereum’s by more than $10 million.The derivatives buildup had already accelerated before September 6. Open interest in ZEC perpetual futures reached a record of about $2.4 billion on September 4. That compared with roughly $700 million in early July, showing that leveraged exposure expanded sharply alongside the price rally.The move also carried the token above $1,000 for the first time since its volatile launch-era trading. At around $1,170, its market capitalization briefly approached $19.8 billion and one snapshot showed it overtaking Hyperliquid.Meanwhile, momentum indicators reflected the speed of the advance. The 14-day relative strength index rose above 82. ZEC also traded at more than 2.5 times its 200-day moving average of approximately $449.40.ETF Inflows Add a Spot-Market CounterweightDerivatives were not the only source of demand. Grayscale converted its long-running Zcash Trust into the Zcash ETF, or ZCSH, during August. Shares were registered for NYSE Arca trading after the trust changed its name on August 24.The fund debuted on August 25 and attracted at least $34.4 million in net inflows. ZCSH gives brokerage investors exposure without requiring direct cryptocurrency custody.Regulatory and network developments also formed part of the backdrop. In January, the Zcash Foundation said the SEC had ended a 2023 subpoena investigation without recommending enforcement action.The network then completed its Ironwood NU6.3 upgrade on July 28. The release introduced a new shielded pool after an Orchard soundness vulnerability. It also aimed to make the integrity of the circulating supply independently verifiable.Despite the latest rally, ZEC remained below CoinGecko’s recorded all-time high of $3,191.93. The immediate market structure instead remained defined by record derivatives exposure, ETF inflows and forced short closures.The September 6 liquidation wave showed how strongly leverage shaped price discovery during the rally. With $45.32 million in ZEC liquidations, the token led a broader $212 million market reset that session.The post Zcash Leads $212M Crypto Liquidation Wave as ZEC Surges 15% appeared first on Blockonomi.