20M Bandit Trims BTC Holdings, Pumps Shorts, Turns Focus to ZEC

Bitcoin selling activity has intensified as a major player in the market, often referred to as the '20M Bandit,' has shifted focus from Bitcoin to Zcash. This shift has also involved increasing short positions in Bitcoin while trimming BTC holdings. The move comes as the broader crypto market faces mixed signals from regulatory and macroeconomic developments.

Zcash, meanwhile, is in the spotlight after the Electric Coin Company team's sudden resignation triggered a 27% plunge in the token. The resignation has led to uncertainty in the market, with analysts warning of further downside potential. This event coincided with large whale transfers of ZEC to exchanges.

Regulatory efforts to finalize a Senate crypto market structure bill have been delayed to late January, with ongoing negotiations focusing on DeFi and stablecoins. The delay adds uncertainty for investors who are already navigating mixed signals in the market.

Why Did This Happen?

The '20M Bandit' has been active in the market, shifting positions from Bitcoin to Zcash and increasing short exposure. The move is part of a broader strategy to capitalize on market volatility and position for potential regulatory outcomes in early 2026.

Zcash's recent plunge is tied to the Electric Coin Company team's mass resignation. The company cited governance disagreements as the cause for the exodus, raising concerns over the project's long-term direction and management stability.

The delay in the Senate's crypto bill has also contributed to uncertainty. Lawmakers have not yet reached a consensus on how to treat DeFi and yield-bearing stablecoins, two key components of the digital asset ecosystem.

How Did Markets React?

Bitcoin's price remains under pressure despite accumulation by firms like Strategy, which recently purchased $1.25 billion worth of BTC. However, sell-side dominance persists, with declining cumulative volume delta and increased speculative participation among short-term holders.

Zcash has seen a sharp decline in value, with the token dropping from $530 to near $400 within a few days. Whale activity, including a $35 million transfer to Binance, has exacerbated downward momentum.

The broader crypto market has shown mixed performance. While altcoins gained 7%, Zcash and other privacy-focused tokens have underperformed due to governance issues and market sentiment shifts.

What Are Analysts Watching Next?

Market watchers are closely monitoring the Senate's delayed crypto bill markup, expected by the end of January. A finalized framework on DeFi and stablecoins could provide regulatory clarity and influence market sentiment.

Investors are also watching Zcash's recovery potential. Analysts have issued bearish outlooks, with some predicting a potential $55 price range. However, Grayscale has highlighted Zcash as a long-term opportunity amid growing demand for privacy-centric assets.

Bitcoin's ability to hold above $91,000 will be a key indicator of market sentiment. Continued selling pressure could push prices lower, while a shift in macroeconomic conditions might support a rebound.