In early 2026, holders unshielded and circulated a large amount of Zcash (ZEC). This phenomenon occurred amid continued sluggish performance of privacy coins compared to the overall market.
What impact could this have on the price of ZEC? We will take a closer look in the analysis below.
Unshielding of 200,000 ZEC in early 2026
Unshielding is the process of moving assets from a shielded pool that protects privacy to a transparent pool. This stage is primarily conducted for exchange trading or selling.
According to on-chain data, in the first week of January, a holder withdrew more than 200,000 ZEC from the shielded pool. This amount represents approximately 1.2% of ZEC's circulating supply.
As a result of this movement, the growth rate of ZEC held in the shielded pool has slowed. The total balance has decreased from over 5 million ZEC at the end of last year to about 4.86 million ZEC.
According to Arkham Data, the holder unshielded funds after depositing ZEC into the shielded pool about two weeks prior.
The chart shows that unlike the third quarter of 2025, deposits into the shielded pool are no longer increasing rapidly and have transitioned to a sideways trend. While it is difficult to definitively call this a reversal, it suggests that buying sentiment is not as strong as before.
Meanwhile, the on-chain monitoring account LookOnChain reported that a whale sent 74,002 ZEC (approximately $35.75 million) to Binance. This transfer occurred right after a large-scale unshielding, which many investors are interpreting as a signal to prepare for selling.
"Seeing that a whale sent 74,000 ZEC to Binance definitely catches my attention. Such movements are hardly random and are usually part of positioning or liquidity preparation." – Investor Ted
Additionally, CoinAnk reported that ZEC experienced the largest capital outflow from derivatives among altcoins over the past week. The platform also noted a continuing increase in short positions on ZEC.
In fact, while the altcoin market saw a 7% increase from $82.5 billion to $88.5 billion in early 2026, the price of ZEC fell by about 7%, from $530 to $490.
The market capitalization of ZEC has diverged from the overall altcoin market trend, raising questions about whether investors are shifting their expectations for ZEC to other altcoins.
Not only ZEC but also other privacy coins like Monero (XMR) and Dash (DASH) showed poor performance in the market compared to the overall market at the beginning of the year. Artemis assesses that this trend has made the privacy sector the worst-performing sector.
However, recently Grayscale has identified Zcash (ZEC) as a promising altcoin, predicting that the privacy sector will see significant growth in 2026, fueled by increasing interest from institutional investors.