The battle between funds and conviction: ZEC's largest long position is floating with losses exceeding the principal, where will the whales of XMR and DASH go?

As of February 26, 2026, on-chain data analysis platforms show that privacy tokens in the Hyperliquid market are experiencing a severe holding test. The top addresses (whales) holding ZEC, XMR, and DASH are all currently at unrealized losses and have not chosen to close or exit their positions. Among them, the largest long position in ZEC (0xcf9) is in the most dangerous situation: this address holds a long position with 10x leverage, with unrealized losses exceeding the original position size, making it the most representative “stress test” sample during this privacy coin price correction.

Overview of Whale Unrealized Loss Events

This fund movement revealed by on-chain monitoring tools exposes the brutal side of the market under high leverage. According to Gate market data, recent buying momentum in the privacy sector has weakened, causing whales heavily invested earlier to suffer significant paper losses.

Specifically, the largest long address in ZEC (0xcf9) used 10x leverage to go long, with a position size of $5,030,000 and an entry price of $574. However, as the coin price declined, this address’s unrealized loss has deepened to $6,680,000, a 294% loss. This means not only has the principal been wiped out, but if valued at market price, the owner would need to fill a huge funding gap. Its liquidation price is set at $142, which has become the last psychological defense line for the longs.

Compared to ZEC’s aggressive stance, the largest XMR long (0xc17) appears more cautious. This address holds a 3x leveraged long position in XMR, with a position size of $3,290,000, an average entry price of $384, and currently unrealized losses of $350,000, a 32% loss. Notably, this address also holds a long in ZEC and has been continuously averaging down and adding to its positions recently.

Meanwhile, the largest DASH long (0xd47) has undergone a dramatic “short to long” shift. Previously, this address was the largest ZEC short position, deeply trapped. Now, it has switched to a 5x leveraged long in DASH, with a position of $1,630,000 at an average price of $64, but faces a massive unrealized loss of $1,340,000 (414%).

Background and Timeline

This whale unrealized loss event is not an isolated price fluctuation but a concentrated reflection of the long-term pressure on the privacy sector.

As early as early February 2026, the privacy sector had already suffered a heavy blow. Due to tightening global regulatory environments, especially in the EU, with increased AML compliance scrutiny, mainstream centralized exchanges imposed restrictions on privacy coins, causing Zcash (ZEC) and Monero (XMR) to lead declines, with the overall market cap of privacy coins once evaporating over 25%. This decline laid the groundwork for the high-leverage longs’ current losses.

By mid to late February, the market did not see a strong rebound. Although XMR experienced a technical rebound at the key support level of $300, open interest in derivatives increased, indicating some whale interest returning. Still, the overall price remained constrained by the 200-day exponential moving average (EMA) at $375. In this context of bullish and bearish tension, the whales above chose to “hold their positions” in high-leverage perpetual markets like Hyperliquid, creating the on-chain spectacle observed now.

Data and Structural Analysis

From the perspective of capital efficiency and risk exposure, these three whales exhibit very different strategic logics:

• ZEC Whale (0xcf9): The high-leverage die-hard
  • Facts: 10x leverage, holding $5.03 million, average price $574.
  • Analysis: The unrealized loss of $6.68 million indicates the address has not only lost all principal but is on the brink of liquidation. This is a typical “all-in” gambler mentality. The liquidation price at $142 means that as long as ZEC doesn’t go to zero, there is some room to survive. But this “hold at all costs” approach consumes huge capital costs and strips away trading autonomy.
• XMR Whale (0xc17): Institutional averaging strategy
  • Facts: 3x leverage, holding $3.29 million, unrealized loss $350K, continuously adding to ZEC and XMR positions.
  • Analysis: 3x leverage is relatively conservative in derivatives trading. A $350K unrealized loss for an address managing millions is manageable. Its ongoing accumulation suggests a long-term bottom-fishing strategy, attempting to lower the average cost to benefit from future rebounds.
• DASH Whale (0xd47): The fickle trend-follower
  • Facts: 5x leverage, switched from ZEC’s largest short to DASH’s largest long, with a 414% loss.
  • Analysis: This address’s behavior reveals typical “chasing the rally” and “revenge trading” psychology. After being caught short in ZEC, instead of learning from the experience, it immediately switched to a long in DASH, ending up with deep losses. The 414% loss indicates the worst risk control among the three.

Market Sentiment and Perspectives

Regarding these whales’ “hold at all costs” behavior, market opinions mainly fall into two camps:

Mainstream View 1: Faith-based high-stakes gamble

Some community members believe that privacy sector, as a “hard requirement” in crypto, retains long-term value despite short-term regulatory headwinds. These whales’ willingness to leverage in deep waters reflects true “faith armies.” Especially, the averaging operations of the XMR whale are seen as institutional funds exploiting panic sentiment to accumulate.

Mainstream View 2: Passive entrapment and helplessness

Another perspective is more cynical, viewing this as not a proactive bottom-fishing but a consequence of large positions and low liquidity forcing “passive hold.” On platforms like Hyperliquid or other derivatives venues, closing positions now would generate enormous selling pressure, further crashing prices and causing actual losses to far exceed paper losses. Thus, “holding at all costs” is a helpless choice, balancing two evils.

Reality of the Narrative

We must critically examine the logical traps behind the “whale hold at all costs” narrative.

Factually, on-chain data does show these addresses haven’t closed positions. But speculation that “not closing” equals “bullish outlook” or “strong long” is unfounded.

First, derivatives positions can be deceptive. An address may represent complex fund management strategies, possibly hedging elsewhere, or part of a larger quantitative strategy.

Second, the term “hold at all costs” carries emotional weight. Rationally, it resembles a “liquidity lock-up” state. Under current regulatory shadows, the fundamentals of privacy coins haven’t fundamentally improved. Without major technological breakthroughs or compliance breakthroughs, relying on whales to “stick it out” is akin to a futile effort.

Industry Impact Analysis

This event serves as a warning to the privacy sector and the entire crypto derivatives market.

For the privacy sector, high-leverage losses will scare away speculative capital. When the market sees that even the “biggest long” can’t support prices, retail investors’ bottom-fishing enthusiasm will plummet, potentially leading to a negative spiral of “price decline—longs liquidated—liquidity dries up—further price drops.”

For derivatives markets, it exposes risks in centralized perpetual platforms like Hyperliquid. When a single address’s position dominates the leaderboard and faces liquidation, its impact on the entire trading pair can be significant. As ZEC approaches the $142 liquidation level, the liquidation sell orders worth millions of dollars could trigger a cascade of price slippage.

On a macro level, this contrasts sharply with the booming market for privacy-enhancing technologies like zero-knowledge proofs and federated learning, which grow at a 23.5% CAGR. While traditional internet privacy tech expands, compliant “privacy tech” and unregulated “privacy coins” are diverging onto separate paths.

Scenario Evolution and Projections

Based on current structures, three possible scenarios can be projected:

• Scenario 1: Technical rebound (moderate probability)

If Bitcoin stabilizes or market sentiment improves, and XMR can hold above the $375 key resistance, a revenge rally in the privacy sector could occur. In this case, the XMR whale would likely unwind its position first, easing pressure on ZEC whales, providing a chance for “life-saving” partial liquidation.

• Scenario 2: Liquidation death spiral (higher probability)

If the market continues downward, ZEC approaching $142 liquidation level will trigger chain reactions of liquidation. This could cause ZEC to plummet sharply, triggering panic selling in DASH and XMR, turning “hold at all costs” into a mass exodus.

• Scenario 3: Prolonged stalemate (very high probability)

The most likely scenario is a “boiling frog” situation: prices remain stagnant, whales cannot add or cut positions, and funds are gradually drained by funding rates until margin exhaustion forces passive liquidation. This long-term liquidity drain would cause the deepest harm to the sector.

Conclusion

The $668K unrealized loss of the ZEC whale is essentially a tragic song of high leverage and high conviction in a bear market cycle. These on-chain data are not just cold numbers but real-time reflections of market greed and fear. For ordinary investors, rather than watching whales “hold at all costs,” it’s wiser to recognize that in the privacy sector, where regulation remains uncertain, controlling leverage may be more important than predicting direction. For these whales still holding on, time and liquidity are becoming their most expensive enemies.