In early 2026, holders unshielded a large amount of Zcash (ZEC) and put it into circulation. This activity comes as privacy coins continue to underperform the overall market.
How could the price of ZEC be affected? We will explore the details in the following analysis.
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More than 200,000 ZECs will be unshielded in early 2026
Unshielding refers to the process of converting funds from a shielded pool to a transparent pool that protects privacy. This step is often done to enable exchange trading or sales.
According to on-chain data, in the first week of January, holders withdrew more than 200,000 ZEC from the shielded pool. This amount corresponds to approximately 1.2% of ZEC’s circulating supply.
This move slowed the growth of ZECs held in shielded pools. The total has returned to around 4.86 million ZEC after peaking at more than 5 million late last year.
According to Arkham data, holders had deposited ZEC in a shielded pool just over two weeks ago before proceeding to unshield their funds.
This graph shows that deposition in the shielding pool is not accelerating as it was in Q3 2025. Activity is moving sideways. While this does not confirm a reversal, it does suggest that bullish sentiment is not as strong as before.
Meanwhile, on-chain monitoring account LookOnChain reported that the whale transferred 74,002 ZEC (equivalent to approximately $35.75 million) to Binance. This move comes just one day after a major unshielding event. Many investors see this as a potential sign of preparations to sell.
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“Seeing a whale transfer 74,000 ZEC to Binance will definitely give you pause. Such movements are rarely random and are usually positioning or liquidity provisioning,” said investor Ted.
Additionally, ZEC ranks among the altcoins with the highest amount of derivative capital outflows over the past week, according to CoinAnk. The platform also reports that short positions in ZEC continue to increase.
In fact, the altcoin market showed signs of recovery in early 2026, with TOTAL3 increasing by 7% from $825 billion to $885 billion, while ZEC’s price fell by about 7% from $530 to $490.
The deviation of ZEC from the overall market capitalization of altcoins raises the question of whether investors are abandoning their expectations for ZEC and supporting other altcoins.
Not only ZEC, but other privacy coins such as Monero (XMR) and Dash (DASH) also underperformed the overall market earlier this year. According to Artemis, this trend has made privacy the worst-performing sector.
However, Grayscale recently highlighted Zcash (ZEC) as a promising altcoin. The company also expects the privacy sector to continue to see strong growth in 2026, supported by increased interest from institutional investors.
