Zcash Flips HYPE As $2.4B Open Interest Raises The Stakes For Its Rally

Zcash (ZEC) jumped past Hyperliquid (HYPE) on Sunday to become the ninth-largest cryptocurrency by market cap, as a month-long rally in the privacy token showed no signs of slowing.CoinGecko data showed that ZEC’s market cap soared to around $19.80 billion, surpassing HYPE’s $19.36 billion.  was up over 16% during the past 24 hours, trading at $1,170. On Stocktwits, the retail sentiment around ZEC remained in the ‘extremely bullish’ zone, while chatter around it stayed at ‘extremely high’ levels over the past day. The flip completed a breakout that began on Friday when  for the first time in a decade.Still Far From RecordBut even with the recent rally, ZEC remained far below its all-time high of $3,191, which it reached in October 2016. The gap, hence, raises a question not about whether ZEC can rise in price but whether it can hold the rally.Koyfin data suggested that the move was stretched. ZEC was trading at more than 2.5 times its 200-day simple moving average (SMA) of $449.40. The 200-day average was a common gauge of an asset's long-term trend, and a gap this wide above it usually signals a rally that has run ahead of itself.Leverage Doing The Heavy LiftingOpen interest (OI) in ZEC perpetuals — the total value of open leveraged bets- hit a record high of roughly $2.4 billion on Friday, according to CoinGlass data. Open interest has tracked price almost exactly throughout the rally, a sign that new leveraged positions rather than spot buying alone have been driving the move.The liquidation data also showed how leverage snowballed. CoinGlass showed a first wave of short liquidations of $25 million to $30 million a day around August 19 to 22, when the rally began to gain pace, followed by another batch of about $34 million in forced short closures in the latest session as ZEC pushed through $1,000. Each round of short covering took the price higher and attracted more leveraged longs behind it.Overbought, And Vulnerable To A ReversalZEC’s 14-day relative strength index (RSI) was 82.18. RSI measures the speed of recent price moves on a scale of 0 to 100, with readings above 70 considered ‘overbought.’ ZEC at 82 was far above that line, indicating strong momentum but also a rally that is susceptible to a pullback.Leverage at a record, the same crowding that squeezed shorts on the way up could turn just as fast. CoinGlass data showed the biggest single liquidation event of the year wasn’t a short squeeze but rather a long wipeout of about $67.6 million in early June as ZEC fell to around $380 after the  announcement. With open interest at an all-time high and the RSI overbought, a sharp reversal could trigger a similar cascade of long liquidations.What Are Retail Traders Saying? View this Stocktwits postOne Stocktwits user said this was "no ordinary short squeeze," noting that "millions of dollars [were] being liquidated every hour as it [moved] higher," and that those liquidations "equate to buys." The user added that breaking $1,000 dissolved “any amount of near-term resistance, especially the psychological barrier that many thought it would face," calling the setup "a rare opportunity to make a ton of money on a free ride courtesy of overextended shorts."