Zcash (ZEC) initially rose 5% on October 12 as traders positioned ahead of its upcoming NU7 network upgrade, but the rally quickly reversed. By the close, ZEC was down 8.5% for the session, reflecting a derivatives-driven short squeeze that ran out of momentum.
The pullback leaves ZEC roughly 26% below its September 26 closing peak of $1,653.12. It recovered toward $1,215 on October 13, but the decline from the September high remains significant. Approximately $19.9 million in leveraged positions were liquidated during the volatility, while 24-hour derivatives trading volume had climbed near $5.46 billion at the height of speculative interest.
Broader market conditions contributed to the pressure, with Bitcoin slipping toward $81,000 and investors reducing exposure to riskier digital assets ahead of Wednesday's U.S. inflation data.
The NU7 upgrade remains the key long-term catalyst. The Zcash Foundation has moved the upgrade into testnet preparations, proposing a reduction in block spacing from 75 seconds to 25 seconds, along with transaction fee changes and sustainability mechanisms. A final mainnet activation decision is expected around October 20, with November 5 named as the proposed launch date.
Technically, ZEC briefly traded near $1,124 on October 13, putting the $1,100–$1,125 area in focus as support. A sustained break below that band could expose the psychological $1,000 level, while a recovery above $1,300 would place ZEC back within its earlier October range.
