Privacy-focused cryptocurrencies have endured a sharp correction in recent days, with Zcash (ZEC) spearheading the downturn, followed closely by Dash (DASH) and Starknet (STRK). As the sector grapples with over $17 million in short-term liquidations, investors are weighing whether this represents a temporary shakeout or a more ominous reversal. With ZEC dropping over 10% in 24 hours to around $504, the question arises: is now the time to buy the dip?

What Happened: ZEC’s 10%+ Drop and $17M Liquidations

Zcash, the pioneering privacy coin leveraging zk-SNARKs for shielded transactions, has led the sector’s decline, falling more than 10% in the past 24 hours to $504. This pullback follows a remarkable rally that saw ZEC surge over 1,500% since September 2025, peaking at $748 before profit-taking ensued. The correction has triggered $17 million in liquidations, predominantly from short positions, as leveraged traders were caught offside during the volatility.

Dash has experienced a similar fate, declining alongside ZEC, while Starknet’s STRK token has shown resilience but still faces downward pressure. The resumption of Dash trading on major platforms failed to halt the slide, underscoring broader sentiment challenges in the privacy niche.

• ZEC 24H Change: -10% to $504
• Liquidations: $17M (mostly shorts)
• Recent Peak: $748 (mid-November 2025)

Fund Flows: Bulls and Bears Battle in ZEC Contracts

The ZEC perpetual futures market remains a battleground, with positive funding rates indicating longs are paying shorts to maintain positions. However, open interest has dipped slightly, reflecting cautious positioning amid the pullback. Short-term funds have been active, but overall participation shows no clear dominance, keeping volatility elevated.

This tug-of-war highlights the sector’s sensitivity to broader crypto trends, where privacy narratives gain traction during risk-off periods but face profit-taking after rapid gains.

Market Sentiment: Divided Views on Buy-the-Dip

Community sentiment is split, with bullish voices viewing the dip as a cost-effective entry point and bears questioning ZEC’s fundamentals. On X, KOLs and traders express a mix of shill and anxiety, fostering an atmosphere of watchful speculation. Some highlight ZEC’s battle-tested zk-SNARKs and recent integrations like the Zashi wallet for cross-chain shielded swaps, while others point to historical centralization concerns from its 2016 launch.

Overall, the discourse leans toward observation, with 55% bullish on long-term privacy demand but 45% cautious on short-term reversals. The Fear & Greed Index for privacy coins hovers in neutral territory, reflecting the balanced debate.

Trading Guide: Swing Trading in Divergent Structure

ZEC’s price structure reveals significant divergence, with risks of high-level distribution. The key level is $425; a break below could confirm a top and bearish reversal. High-leverage contracts are not recommended for short-term trading—opt for conservative swing strategies instead.

• Bullish Case: Hayes’ privacy narrative and 30% shielded pool growth signal rotation potential; target $550-$570.
• Bearish Case: Daily trend remains downtrending; RSI oversold (32) but BTC pair at 0.0008 lacks support—watch $400 test.
• Risks: Low social volume and stagnant on-chain flows; macro liquidity delays could extend weakness.

In summary, ZEC’s 10% drop to $504 amid $17M liquidations and privacy sector pullback, with DASH and STRK following, divides sentiment between dip-buyers and fundamentals skeptics—swing trading above $425 offers entry, but leverage remains risky in this divergent setup.