Zcash News Today: ZEC Short's Persistent Losses and Popcat Debacle Challenge Hyperliquid's Liquidity

Hyperliquid's Zcash (ZEC) market has become a focal point for volatility as the largest short position on the exchange has persisted for over a month, with unrealized losses narrowing from a peak of $20.19 million to $9.5 million as of November 14. The position, initiated on October 11, reflects a strategic effort by a whale to capitalize on a declining ZEC price, with the opening price at $336 and the current price near $508. This whale has continuously added to the short position during price increases to lower the average entry cost, signaling a high-conviction bearish stance.

The ZEC short is not an isolated bet. The same wallet also holds a 15x leveraged Ethereum (ETH) short worth $27 million, which has generated an unrealized profit of $5.5 million as ETH's price has risen from $4,094 to its current level. This dual strategy highlights the trader's ability to hedge against cross-asset movements while maintaining a leveraged position in a correlated market. Meanwhile, another whale has been liquidating a ZEC long position, having reduced its holdings by over 30,000 ZEC in a 9-hour period to cut losses as the price fell below its average entry point.

The ZEC short squeeze has unfolded amid broader challenges for Hyperliquid. On November 13, the exchange temporarily paused Arbitrum-based deposits and withdrawals after a Popcat (POPCAT) trader triggered a $4.9 million loss for the platform's community-owned vault. The incident involved a $3 million stablecoin investment used to open $20 million in long Popcat positions across 19 wallets, which were later liquidated as the meme coin's price collapsed. Hyperliquid's market maker, HLP, absorbed the losses, exacerbating retail demand weakness for the exchange's native token, HYPE.

Futures open interest for HYPE has declined by nearly $500 million since October, reflecting waning risk appetite among traders.

The ZEC short position's persistence underscores the tension between leveraged bearish bets and market dynamics. While the whale's ZEC short has seen losses shrink from $20 million to $9.5 million, the position's notional value remains at $28 million. Conversely, the same whale's ETH short has benefited from a 13.2% price increase since its opening, illustrating the dual-edged nature of leveraged trading. Analysts note that such concentrated positions can amplify market volatility, particularly in assets like ZEC, where privacy-focused features attract speculative flows.

Hyperliquid's response to the Popcat incident has further complicated its reputation. Critics argue that the exchange's manual closure of the liquidated Popcat position and its decision to delist Solana-based meme coin JELLYJELLY signal a departure from decentralized principles. The platform's recent technical issues, including the Arbitrum bridge pause, have also raised questions about its infrastructure resilience.

As the ZEC short remains open and the Popcat fallout reverberates, Hyperliquid's ecosystem faces a test of its liquidity management and governance model. The interplay of leveraged bets, meme coin speculation, and regulatory scrutiny continues to define the exchange's trajectory in a rapidly evolving crypto market.